The term ‘natural capital’ refers to the ‘stock’ or ‘inventory’ of physical attributes in the natural world such air, land, water, flora and fauna, and the direct and indirect ‘services’ that these provide.
How can natural capital affect your business?
Of all the issues competing for attention at the Board and management level, the opportunities and risks associated with natural capital deserve serious consideration. Businesses are one of the main consumers of natural capital and changes in stocks of natural capital can have profound effects. The United Nations Environment Program for Financial Institutions study estimates that over 50% of current company earnings may be at risk from changes to the environmental cost base.
The Natural Capital Coalition, which Arcadis plays an active role in, published its Natural Capital Protocol in 2016 and provides an excellent example of a business-based framework for assessing, demonstrating and managing opportunities and risks using the natural capital approach.
Any business seeking to benefit from the natural capital approach must start with a solid understanding of the dependencies and impacts that they and their value chain have on natural capital including the services it provides.
To read more about the impact of natural capital and to find out more about the risks and opportunities across the whole value chain - from raw material production, transport and energy transmission to manufacturing and then to the cities - download our briefing paper below.
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