The term natural capital is often used synonymously with nature, ecosystem services and biodiversity. In essence, it’s the economic value we derive from natural processes.
Nature is being destroyed and degraded at alarming rates around the world, and this poses significant threats and risks for humanity and our wellbeing - as well as for businesses.
By placing a value on nature, and measuring impacts and dependencies on nature, companies are better placed to realise both the risks presented by the loss and degradation of natural capital as well as the opportunities arising from its protection, sustainable use and restoration.
Natural capital refers to a wide range of goods and services that are provided by renewable and nonrenewable resources, such as plant and animal species, ecosystems and minerals.
These ecosystem services, including the provision of clean air and water, and the production of food and natural resources like wood, are essential to life on earth and to all economic activity.
Nature is increasingly being recognised as critical for businesses in helping manage sustainable supply chains, climate risks, reputations, and environmental, social and governance (ESG) compliance.
It’s important to place a value on nature and ecosystem services. Otherwise, there’s little understanding of the significant role nature plays in our wellbeing and the global economy. Historically, this has led to nature being destroyed, exploited and degraded at an alarming rate worldwide.
Several organisations and business coalitions such as the Capitals Coalition, the Economics of Ecosystems and Biodiversity, and Business for Nature, have begun to create tools to value nature, and dependence on nature, to help better inform decision-making and to make an economic case for nature and its protection, sustainable use, and restoration.
As a recent World Bank report points out, “the world cannot afford the collapse of ecosystem services, as such a collapse would cost 2.3 percent of global GDP (-$2.7 trillion) annually by 2030 and some of the poorer countries would be hit hardest.”
Businesses are increasingly aware of the need to measure and report on their impacts and dependence on biodiversity to remain compliant, but also as a means to create resilience and enhance sustainability by taking steps to be nature positive.
In doing so, future-oriented companies are able to embrace the many business opportunities such as the use of nature-based solutions to manage costs, supply chains and business risks.
Businesses can take action and contribute to a nature-positive future by incorporating natural capital accounting. As part of any robust sustainability corporate strategy, it’s critical for businesses to understand the value of nature, the risks associated with the loss of nature, and opportunities in developing data-driven, nature positive sustainability solutions and strategies.
Navigating complex and integrated corporate sustainability requirements, and ensuring your business is future-proof and resilient requires deep knowledge of sustainability, corporate governance, business best practices, and opportunities for collaboration and partnerships.
Looking for a sustainability consultant to help you drive business transformation, resilience, and growth - while managing the risks and opportunities associated with your impacts and reliance on nature? Then connect with me for a collaborative discussion on how we can work together to advance your sustainability journey.
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