New Protocol Brings a Breath of Fresh Air for Managing Natural Capital
by Patrick Little, Senior Environmental Consultant, and Hannah Scott, EMEA Sustainability Coordinator, at CBRE
The Earth’s natural resources, whether it’s the air, water, soils, geology or ecosystems around us, sustain all life on earth. These resources, sometimes termed ‘natural capital’, provide us with a vast range of services, from the more obvious examples, such as the food we eat and the materials we use to build our towns and cities, to those less visible, such as climate regulation and the pollination of plants by insects.
For generations, the earth’s resources of natural capital have been taken for granted. Yet these resources are finite and the increasing pressure placed on them by a rising global population with ever increasing levels of consumption is pushing them to breaking point. Symptoms, such as climate change, resource scarcity, waste, air pollution and biodiversity loss, are irrefutable.
Business has played a significant role in the overconsumption of resources. A study by the TEEB for Business Coalition released in April 2013 estimated that the environmental impact of doing business costs the global economy $4.7 trillion per year in uncompensated costs to the environment. The study focused on the top 100 uncompensated environmental costs or “externalities”. Those that made up the largest share were greenhouse gas emissions (38%), followed by water use (25%) and land use (24%). According to the report, some business sectors, such as mining, create an economic loss when accounting for such things as natural resource use and pollution costs. Changes to the way businesses consider natural capital is clearly required.
Developed by the Natural Capital Coalition – a collaborative initiative consisting of economists, businesses, not-for-profits, civil society, scientists and academics – the Natural Capital Protocol(NCP) launched on Wednesday aims to work toward “a shift in corporate behaviour to conserve and enhance our natural capital”.
Due to the perceived benefit of understanding natural capital by business, there have been several methodologies developed in the emerging discipline of natural capital accounting to date, with no mutually accepted approach, making the field particularly challenging to navigate.
The NCP aims to allow businesses to value and account for natural capital as systematically as they do for financial capital. Through a new standardised framework, the NCP leverages the numerous existing approaches to create a universal methodology that applies internationally, across all business sectors, geographies, and organisational levels.
In addition to the generic Natural Capital Protocol, which is applicable across all sectors, the Natural Capital Coalition have developed supplementary sector-specific guides for both Apparel, and Food & Beverages sectors to reflect sector-specific priorities. In the pipeline are guides for Finance, Construction, Oil & Gas, and Water sectors.
The field of natural capital accounting has become a puzzling one, with businesses unable to clearly identify appropriate methodologies, or easily compare their own impacts with that of their competitors. The Natural Capital Protocol looks set to provide the direction that is needed in enabling organisations around the world to better value nature in their own decision-making processes. Exciting times ahead!
