The extractives sector, including oil and gas exploration activities, has fueled much of the world’s economic growth and development, and contributed to the quality of life we all appreciate today. However, this has often been at the cost of declines in natural capital. As a result, this sector is often heavily regulated and under constant stakeholder scrutiny. Natural capital considerations provide opportunities to plan, create, operate and decommission assets that can genuinely secure a more sustainable future and enhanced reputation for this sector.
Where projects seek access to international finance they may be required to demonstrate ‘no net loss’ (NNL) of natural capital (mostly in the form of ‘biodiversity and ecosystem services’ or ‘water’). By understanding the present and potential natural capital value of the assets under an organization’s control early in the planning phase, such obligations can often be discharged without significant additional financial investment in mitigation, restoration or compensation.
A major natural gas project in the Russian Arctic was seeking international finance to fund a large capital investment project. A clear approach was needed to address IFC requirements for net gain of critical habitat and No Net Loss of natural habitat or ecosystem services. Arcadis ensured that the project was in compliance with IFC Performance Standard 6* to manage environmental and social risks and impacts. Ecosystem sensitivities addressed included preserving the livelihoods of the indigenous population, as well as a number of protected and/or endangered species.
*International Finance Corporation (IFC) Performance Standard 6 – Biodiversity conservation and Sustainable Management of Living Natural Resources
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