Explore the resources below to assist in completing this action.
Biodiversity Guidance action 3.2.3
3.2.3 Specify whose value perspective
The value perspective for a biodiversity-inclusive assessment may vary. As outlined in page 33 of the Protocol, you can carry out natural capital assessments from a business value perspective, a societal value perspective, or both.
Business and societal value perspectives focus on different aspects of biodiversity’s value. Depending on the value perspective that you choose, you will be assessing different aspects of your relationship with biodiversity:
- By choosing a business value perspective, you will primarily be assessing:
- Consequences of your dependencies on biodiversity (e.g., financial implications for your business of decrease in pollination services);
- Consequences of your impacts on biodiversity for your own operations and performance (e.g., reputational damage due to your impacts on biodiversity, or social license to operate and other legal, operational, or reputational risks).
- By choosing a societal value perspective, you will primarily be assessing:
- Consequences of your biodiversity impacts on society (e.g., loss of earning by fishers affected by an oil spill from your company; depleting coastal fish stocks within a reef community, causing a downturn in tourism revenue).
Since ecosystems deliver both societal values and business values, choosing to adopt only a business value perspective can make it difficult to anticipate how broader societal impacts will affect business operations. Adding a societal perspective allows a company to better understand potential biodiversity issues for society as a whole that may be caused by the company’s activities. Such issues can create a societal response that affects business performance, now or in the future. The consequences of your impacts on biodiversity are likely to pose important business risks and opportunities linked to your societal relationships (see the Framing Guidance for more information). A more comprehensive assessment may also give you insights that help in gaining preferential access to resources or financing and build better relationships with stakeholders. Looking at business value in the context of societal values provides a more comprehensive view of the relationship between your business and biodiversity than a purely business value perspective. You are therefore encouraged to consider both value perspectives in your assessment.
Even where many consequences related to a value are captured, you may still underappreciate some values. The intrinsic value of biodiversity is not captured from either a business or a societal value perspective. It is therefore important to keep in mind that values are likely to be minimum estimates when examining the results of any valuation assessment.
See below how a sustainable landscape fund and an infrastructure company are enhancing biodiversity as a result of a valuation assessment.
Company example: FinanceA banking group is participating in a finance facility to support projects that generate environmental and social benefits. Valuation of the costs and benefits of biodiversity enhancement has revealed the strong potential for positive impacts, particularly from a societal perspective. This is because of biodiversity’s role in underpinning delivery of a broad and resilient range of goods and services to local communities, and its intrinsic and existence values across wider society.
The importance placed on biodiversity has been reflected in the finance facility’s transactions. For example, it has provided a bond for a sustainable rubber plantation in a degraded forest. More than half of the concession area will be set aside for restoration and environmental conservation. This is expected to provide benefits for livelihoods of local communities and create a buffer zone for a national park with several large and charismatic species that are Endangered on a global scale.
The private value of the sustainable rubber, combined with public, NGO, and private willingness to invest to restore the wider ecosystem for biodiversity and other ecosystem benefits, allowed for a financing instrument to deliver multiple values of biodiversity to different stakeholders at a landscape scale.
A banking group is participating in a finance facility to support projects that generate environmental and social benefits. Valuation of the costs and benefits of biodiversity enhancement has revealed the strong potential for positive impacts, particularly from a societal perspective. This is because of biodiversity’s role in underpinning delivery of a broad and resilient range of goods and services to local communities, and its intrinsic and existence values across wider society.
The importance placed on biodiversity has been reflected in the finance facility’s transactions. For example, it has provided a bond for a sustainable rubber plantation in a degraded forest. More than half of the concession area will be set aside for restoration and environmental conservation. This is expected to provide benefits for livelihoods of local communities and create a buffer zone for a national park with several large and charismatic species that are Endangered on a global scale.
The private value of the sustainable rubber, combined with public, NGO, and private willingness to invest to restore the wider ecosystem for biodiversity and other ecosystem benefits, allowed for a financing instrument to deliver multiple values of biodiversity to different stakeholders at a landscape scale.
Company example: Infrastructure companyAn infrastructure company responsible for improvements to a major highway has used a natural capital approach in assessing the potential impacts of the development. Impacts on Threatened species and habitats have been identified as priority issues, alongside inputs of water, construction materials, and energy.
The company has committed to replace habitats cleared as a result of the project within the landscape. The costs of biodiversity impacts were valued from the perspective of purchasing land and implementing restoration, and the benefits understood from the perspective of societal benefits provided by biodiversity. Examination of expected benefits over time revealed that it would take 15 years for the quality of benefits received from biodiversity to recover to pre-development levels.
Monetary valuation revealed that it was feasible to purchase additional land for restoration, enabling double the area of habitat cleared to be restored. This is expected to allow biodiversity to recover to pre-development levels over a shorter time period, and eventually to result in net gain in biodiversity and the benefits that it provides to society. This decision strengthened support for the development from wider society, assisting the company’s planning application.
An infrastructure company responsible for improvements to a major highway has used a natural capital approach in assessing the potential impacts of the development. Impacts on Threatened species and habitats have been identified as priority issues, alongside inputs of water, construction materials, and energy.
The company has committed to replace habitats cleared as a result of the project within the landscape. The costs of biodiversity impacts were valued from the perspective of purchasing land and implementing restoration, and the benefits understood from the perspective of societal benefits provided by biodiversity. Examination of expected benefits over time revealed that it would take 15 years for the quality of benefits received from biodiversity to recover to pre-development levels.
Monetary valuation revealed that it was feasible to purchase additional land for restoration, enabling double the area of habitat cleared to be restored. This is expected to allow biodiversity to recover to pre-development levels over a shorter time period, and eventually to result in net gain in biodiversity and the benefits that it provides to society. This decision strengthened support for the development from wider society, assisting the company’s planning application.
