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“Last month, the Natural Capital Protocol launched to great fanfare at Chartered Accountants Hall in London. The Protocol is a standardized framework for business to identify, measure, and value their direct and indirect impacts and dependencies on natural capital. That is, the earth’s stock of resources (e.g., plants, animals, air, water, soils, and minerals) that combine to yield a flow of benefits to businesses and individuals.

Understanding where a business’s most significant impacts and dependencies on the natural world lie allows for the inclusion of this information into operational and strategic decisions, and can lead to a wide range of potential benefits for businesses as well as the environment.

For example, Yorkshire Water, a water supply and treatment utility company in the UK, which piloted the draft version of the Protocol, reported that the largest benefit they experienced was in assessing options for new investments. They found that having estimates of the monetary value of different services delivered by a site can be a highly empowering internal and external engagement tool.

Such assessments could allow an organization like Yorkshire Water to invest in geographies where relevant ecosystem services, for instance services that provide fresh water or those that purify it, are robust and secure. This relieves pressure on sites where services are degraded, and minimizes any shocks that Yorkshire Water may experience if these types of local services are impaired or disappear completely. As Liz Barber, Group Director of Finance and Regulation for Yorkshire Water put it, “We have a huge dependency on, and impact on, the local environment; that’s why we support the Natural Capital Protocol.”…”

Read on at: IFAC Global Knowledge Gateway