Natural capital
Natural capital is the world's stock of natural resources, which includes geology, soils, air, water and all living organisms. Some natural capital assets provide people with free goods and services, often called ecosystem services. All of these underpin our economy and society, and thus make human life possible.[3][4]
It is an extension of the economic notion of capital (resources which enable the production of more resources) to goods and services provided by the natural environment. For example, a well-maintained forest or river may provide an indefinitely sustainable flow of new trees or fish, whereas over-use of those resources may lead to a permanent decline in timber availability or fish stocks. Natural capital also provides people with essential services, like water catchment, erosion control and crop pollination by insects, which in turn ensure the long-term viability of other natural resources. Since the continuous supply of services from the available natural capital assets is dependent upon a healthy, functioning environment, the structure and diversity of habitats and ecosystems are important components of natural capital.[5] Methods, called 'natural capital asset checks', help decision-makers understand how changes in the current and future performance of natural capital assets will impact human well-being and the economy.[6] Unpriced natural capital is what we refer to when businesses or individuals exploit or abuse nature without being held accountable, which can harm ecosystems and the environment. [7][8][9]
In June 2012 a 'natural capital declaration' (NCD) was launched at the Rio+20 summit held in Brazil. An initiative of the global finance sector, it was signed by 40 CEOs to 'integrate natural capital considerations into loans, equity, fixed income and insurance products, as well as in accounting, disclosure and reporting frameworks.' They worked with supporting organisations to develop tools and metrics to integrate natural capital factors into existing business structures.[26]
In summary, its four key aims are to:
Natural Capital Protocol[edit]
In July 2016, the Natural Capital Coalition[27] (now known as Capitals Coalition) released the Natural Capital Protocol.[28] The Protocol provides a standardised framework for organisations to identify, measure and value their direct and indirect impacts and dependencies on natural capital. The Protocol harmonises existing tools and methodologies, and guides organisations towards the information they need to make strategic and operational decisions that include impacts and dependencies on natural capital.
The Protocol was developed in a unique collaboration between 38 organisations who signed voluntary, pre-competitive contracts. This collaboration was led by Mark Gough, who is now the CEO of the Capitals Coalition.[29]
The Protocol is available on a creative commons license and is free for organisations to apply.
Environmental-economic accounts provide the conceptual framework for integrated statistics on the environment and its relationship with the economy, including the impacts of the economy on the environment and the contribution of the environment to the economy. A coherent set of indicators and descriptive statistics can be derived from the accounts that inform a wide range of policies.
These include, but are not limited to:
The System of Integrated Environmental and Economic Accounting (SEEA) contains the internationally agreed standard concepts, definitions, classifications, accounting rules and tables for producing internationally comparable statistics on the environment and its relationship with the economy. The SEEA is a flexible system in the sense that its implementation can be adapted to countries' specific situations and priorities. Coordination of the implementation of the SEEA and ongoing work on new methodological developments is managed and supervised by the UN Committee of Experts on Environmental-Economic Accounting (UNCEEA). The final, official version of the SEEA Central Framework was published in February 2014.
In March 2021, the United Nations Statistical Commission adopted the SEEA Ecosystem Accounting (SEEA EA) standard at its 52nd session.[30] The SEEA EA is a statistical framework that provides a coherent accounting approach to the measurement of ecosystems. Ecosystem accounts enable the presentation of data and indicators of ecosystem extent, ecosystem condition, and ecosystem services in both physical and monetary terms in a spatially explicit way.[31] Following its adoption, the Statistics Division of the United Nations Department of Economic and Social Affairs (UN DESA) in collaboration with the United Nations Environment Programme (UNEP) and the Basque Centre for Climate Change (BC3) released the ARIES for SEEA Explorer[32] in April 2021, an artificial intelligence-powered tool based on the Artificial Intelligence for Environment and Sustainability (ARIES) platform for rapid, standardized and customizable natural capital accounting.[33] The ARIES for SEEA Explorer was made available on the UN Global Platform in order to accelerate SEEA's implementation worldwide.[34]