Natural Capital: Ten Things All Businesses Should Know – Sustain Value

February 05, 2018 |

This Briefing Note was originally published on Sustain Value.

“Natural capital has increasingly featured in boardroom discussions over the past few years, but what’s it all about and where is it headed? This Briefing Note sets out ten things you should know.

1) ‘Natural capital’ technically refers to the ‘stocks of natural resources that provide benefits to people’, but is commonly interpreted more broadly to mean the measurement and valuation of environmental impacts and dependencies. The Natural Capital Protocol (the Protocol) was published in 2016 as a standardized framework to help businesses better understand and value their impacts and dependences on natural capital. Whilst the main focus is on company decision-making, the framework is also applicable to company reporting. The Protocol sets out how ‘natural capital assessments’ (see Box 1) can be conducted to assess and value any environmental dependency or impact, covering issues such as biodiversity, water, GHGs, air emissions, waste and disturbances (e.g. noise).

2) The business case for companies to undertake natural capital assessments is multi-faceted and will grow stronger each year. There are numerous drivers, application opportunities and potential returns for companies adopting a natural capital approach. Business case arguments include: i) gaining better insight (e.g. into associated risks and opportunities); ii) improved decision-making (e.g. around prioritization, option appraisal and justifying environmental expenditures); iii) enriched project appraisals and net positive assessments (e.g. to inform mitigation, offsetting and compensation); iv) enhanced resilience (e.g. anticipating price changes, informing strategy and supply chain decisions); v) generating new opportunities (e.g. new products and inspiring innovation); and iv) strengthening communications and reputation. See EU B@B Guide to Selecting a Natural Capital Approach for other applications…”

Read on at: Sustain Value.

Sustain Value Briefing Note 2 - Natural Capital - Final Web Nov 2017

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Introduction from Carl Obst (2017)

Victor Hugo once wrote that “Nothing is so powerful as an idea whose time has come”. Recognising the true value of natural capital, is one such idea. Across private and public sectors, across disciplines, and around the world, initiatives to advance and develop natural capital thinking have emerged rapidly over the past 10 years.

In a blizzard of acronyms, we have the NCC, SEEA, WAVES, IIRC, KIP-INCA, A4S, GRI, EO4EA – among many others. Are they the same, are they competing, are they useful? To both insiders and outsiders this range of initiatives is confusing at best. At worst, it leads to a lack of engagement, avoidance and misunderstanding.

The reality is that, while differences among these various initiatives do exist, they have all been motivated by a common understanding of the reality that we are losing our stocks of natural capital – and that this matters.

While each initiative may have different origins, some differing objectives, and may reflect variations in technique and method, there is much common ground. Indeed, to engage the broader community in tackling the natural capital challenges we collectively face, we cannot afford to focus on distinctions. Instead, we must look to build on the overlaps and seek to build a common language that will enable the exchange of ideas and ongoing innovation.

It is in this spirit of collaboration that the Natural Capital Coalition, together with the IDEEA Group and supported by over 20 organisations, launches this statement on Combining Forces on Natural Capital.

It is especially relevant that this statement of collaboration is launched at the World Forum on Natural Capital, where leading voices in the movement gather every two years, to share best practice, enduring challenges and build further collaborations.

While progress to date has largely taken place in small pockets, in order to move forward we need to ramp up our efforts and move beyond talking with supporters and “the converted”.

For this, we need leaders who can establish spaces for dialogue and development, and who can ensure that technical debates do not form a barrier to progress, that we take full advantage of the diversity of skills and experience already engaged, and that the big picture is always kept in mind.

I encourage you to take the opportunity to read the statement, to share it within your organisations, to sign on, and to join us as we move towards a better understanding and appreciation of the complex and beautiful world in which we live.

Carl Obst is Director of the Institute for the Development of Environmental-Economic Accounting (IDEEA Group), and Lead Author of the United Nation’s System of Environmental-Economic Accounting (UN SEEA).