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.
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