Natural Capital

Natural Capital figure1Natural capital is another term for the stock of renewable and non-renewable resources (e.g. plants, animals, air, water, soils, minerals) that combine to yield a flow of benefits to people.

The benefits provided by natural capital include clean air, food, water, energy, shelter, medicine, and the raw materials we use in the creation of products. It also provides less obvious benefits such as flood defence, climate regulation, pollination and recreation.

Natural capital is one of several other commonly recognized forms of capital. Others include financial, manufactured, social and relationship, human, and intellectual capital.

Natural capital supports all of the other capitals by providing essential resources, that support a healthy planet and underpins thriving societies and prosperous economies.

Why do we need to conserve and enhance natural capital?

The growing need to conserve and enhance natural capital is well documented. We know that we are depleting natural resources faster than the earth can replenish them, and at an accelerating rate (WWF 2014). We have grown financial capital in large part through the use, exploitation, and degradation of natural and social capital.

The Model

Every business impacts and depends on natural capital to some degree and will experience risks and/or opportunities associated with these relationships.

Impacts can be negative, e.g., pollution, or positive, e.g., improved water quality. While impacts are more commonly measured, many businesses have not traditionally recognized their dependencies, e.g., the need for water in production processes.

All of the impacts and dependencies create costs and benefits not only for the business, but also for society. Understanding the connections between business and society and the associated risks and opportunities inform better, more timely decision making.

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