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Value of Natural Capital – the Need for Chartered Surveyors

April 27, 2017 |

This report is a product of the Royal Institution of Chartered Surveyors (RICS).

“Forward: The first paper from RICS on the subject of ecosystem services Challenges for international professional practice: from market value to natural value outlined how new approaches to the valuation, appraisal and management of natural capital and nature’s services – ecosystem services – promised to transform the way land is managed, development is undertaken, assets are appraised and valued, and a range of goods and services previously taken for granted are paid for. The paper predicted that developments in the ecosystem services arena would have far reaching implications for the work of chartered surveyors in valuation, estate and property management, construction, property development and environmental services. Since publication of the paper there has been a plethora of publications and initiatives on the subject from the government and a range of stakeholders.

Value of natural capital – the need for chartered surveyors develops RICS thinking on the topic of ecosystem services. While this paper outlines examples that involve grasslands and woodlands, the approaches involved can be applied across a range of natural assets. It’s important to note the distinction between the value of an asset as it stands for sale/notional sale and the evaluation of an asset for strategic decision-making purposes for its deemed or perceived benefits/dis-benefits associated with its existence, enjoyment, environmental or aesthetic contribution. While the deemed or perceived benefits of some assets may translate into part of a sale/notional sale value, others will not.

From a natural asset perspective, the management of water has considerable potential for development from a number of perspectives. The report from Green Alliance, in partnership with the National Trust, New markets for land and nature outlines how Natural Infrastructure Schemes could pay for a better environment and proposes a new payment mechanism that establishes natural markets to bring new income streams into farming.

It makes recommendations for how government, alongside private endeavour, could accelerate the creation of these viable markets for ecosystem services. Green Alliance work with the National Trust continues. They are working with partners to develop the concept and trial on the ground and RICS are a partner.

Another particular initiative in the natural capital arena to note is the emergence of the concept of Corporate Natural Capital Accounting (CNCA). CNCA enables organisations to gather information on natural capital in a coherent and comparable format to aid decision making concerning the management of natural assets, to the benefit of the organisation and society. It’s important to note the distinction between CNCA and financial accounting and the distinctions between the values attributed to natural assets in corporate natural capital accounts versus those in an organisations financial set of accounts.

RICS encourages all chartered surveyors engaged with land and natural resources in any capacity to familiarise themselves with this paper and other relevant industry publications and stay abreast of developments in the ecosystems services arena as they emerge and evolve…”

Read on and access the report at: Royal Institution of Chartered Surveyors  (RICS).


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