The Natural Capital Protocol

Published 29th March 2016 by Lucy Haines

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As a society, we are collectively depleting our natural capital at a rate of 50% more per year than the earth can replenish. At this rate, if depletion continues to accelerate, it is absolutely vital that measures are taken to preserve and enhance natural capital.

The extent to which depletion of natural capital is a material risk to businesses is increasingly realised. As a result, numerous voluntary frameworks, guidelines and tools have emerged to support organisations in measuring, calculating and reporting their natural capital impacts and dependencies.

The Natural Capital Coalition has synthesised these often divergent methodologies and approaches to form the Natural Capital Protocol. Currently still in draft stages, the final protocol is due for publication in July 2016 and aims to provide a roadmap for businesses to value their impacts and dependencies on natural capital.

Last month, Carbon Clear responded to the first Natural Capital Protocol Consultation. Collaborating with over 500 organisations from different sectors and geographies, we see this as an exciting step in ensuring standard and consistent consideration of natural capital in business decisions.

What is Natural Capital?

Natural Capital encompasses all the stocks and services that the natural world provides us with. From the basic resources that provide us with food, water, fuel and medicine, to the regulation of climate and ecosystems, our entire existence is dependent on the success of natural capital. 

While the ethical and environmental case for the sustainable management of natural capital is clear, the tools and incentives for businesses to manage their resources sustainably have to date not existed. In many instances, the true value of natural capital is not accounted for on the market, facilitating the degradation and depletion of natural capital, by allowing it to be used as a “free” commodity. 

Unsustainable management of natural capital puts local, national and global ecosystems at risk of degradation and ultimately collapse, leaving the businesses and economies that depend on their services at risk, and potentially unable to function. As an example, insect pollination is estimated to be worth US$190 billion a year to global agriculture. Insect productivity directly impacts agricultural output, and if populations continue to decline, the businesses depending on them face significant financial and operational uncertainty.

Leading organisations such as Puma, Marks and Spencer, The Coca-Cola Company and Nestlé are already seeing the benefits of integrating natural capital into their business decisions. By identifying and quantifying the value of natural capital to a business, informed and responsible business decisions can be made – taking into account the risks and opportunities presented by natural capital, and ultimately about the future stewardship of those resources.


The Future of Natural Capital

Since both our economic prosperity and wellbeing rely on natural capital, it is critical that society manages natural resources in a sustainable way. The EU has an objective that ‘by 2020, natural capital and ecosystem services will be properly valued and accounted for by public authorities and businesses’.

With future regulation around resource use likely, early action is key. Due to the inherent complexities of measuring and valuing natural capital, businesses are increasingly seeking clear, credible guidance on the best way to manage and assess their natural capital impacts. The Natural Capital Protocol provides a welcome tool to help start this journey.

Contact us for your Natural Capital Protocol Consultation

 

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