Natural Capital Protocol
The Natural Capital Protocol is a framework designed to help generate trusted, credible, and actionable information for business managers to inform decisions.
The Protocol aims to support better decisions by including how we interact with nature, or more specifically natural capital.
Why apply the Protocol
Every business wants to create greater value, be more efficient and make better decisions. The Natural Capital Protocol aims to help you to do this. In fact if you are not already incorporating natural capital into your decision making you are very likely to be missing significant risks and opportunities for your business.
Applying the Protocol can help you to:
Until now, natural capital has for the most part been excluded from decisions and, when included has been largely inconsistent, open to interpretation, or limited to moral arguments. The Protocol responds by offering a standardized framework to identify, measure, and value impacts and dependencies on natural capital.
The Protocol Framework (figure 0.1) covers four stages, “Why”, “What”, “How”, and “What Next”. Protocol Stages are further broken down into nine Steps, which contain specific questions to be answered when carrying out a natural capital assessment.
When applying the Protocol, use our templates to help you to structure your outputs for each Step.
The Protocol is applicable to any business sector, operating in any geography, at any organizational level. It allows you to measure, value and integrate natural capital into your existing business processes. It does this through a standard framework that covers four stages; “Why”, “What”, “How” and “What Next”. These Stages are further broken down into nine Steps, which contain specific questions to be answered when integrating natural capital into your business processes. Although set out in a linear way, the Protocol is iterative and allows users to adjust and adapt their approach as they progress through the framework.
There are many existing approaches that businesses will be using to measure and value their impacts and dependencies, inform their decision making and strategy, and engage with stakeholders. The Natural Capital Protocol is complementary to all of these and provides a standardized framework to help include natural capital in decision-making.
While there are national level accounting initiatives such as the UN System of Environmental Economic Accounting (SEEA) implemented by governments, through for example, the World Bank led Wealth Accounting and Valuation of Ecosystem Services (WAVES) global partnership, the Natural Capital Protocol is focused at a business decision-making level and can be implemented across boundaries.
Examples from the Apparel sector:
Clothing brand – The rising cost of new materials such as leather, caused a brand’s gross margins to decline contributing to a 36% decline in pre-tax profit.
Supermarket retailer – The identification of carcinogenic azo dyes within 37 product lines, meant recalling almost 208,000 items.
Denim processor – a four year drought impacted many Californian fashion companies, but a denim processor continued with a waterless ozone machine and reduced water use and bills by 50%, saving USD 1,300 per month
The official Endorsement Statement for the Protocol has been signed by people and organizations from all around the world. The statement sets out why natural capital is important and how the Protocol is a vital step towards realising this Coalition’s vision, of a world where business conserves and enhances natural capital.