Natural Capital Assessment – Putting a Value on Your Environmental Impact

The concept of financial capital is well understood. Spending more than we have leads to debt, expensive repayment terms and could ultimately spell the end for our business.

Natural Capital thinking applies this same financial capital logic to natural assets – forests, rivers, land, minerals and water – often collectively owned, these are resources that our businesses draw on to operate and grow.

Globally, we are drawing down on our Natural Capital provisions at a rate of 50 percent more per year than the earth can replenish and the rate of depletion is accelerating.

Businesses who take Natural Capital dependencies and impacts into their decision making process are able to use this as a means to manage risk and to gain competitive advantage. And, while traditional balance sheets and profit and loss accounts do not take account of the value of environmental resources and impacts, Natural Capital Accounting can reflect true societal and financial costs and opportunities.

The business case

Applying Natural Capital accounting within business decision-making or reporting can help businesses focus on and innovate around the more crucial sustainability issues and identify cost savings, reduce risks, improve revenue streams and enhance reputation.

It can help you to:

  • Screen and identify the best location for your activities (e.g. schemes/investments)
  • Identify the most material Natural Capital impacts, to your business and to society, both positive and negative.
  • Evaluate and demonstrate the scale of the potential impacts.
  • Reveal how best your company can reduce risk, maximize positive impact and deliver business value.

To get the full picture, our experts can also help you measure and manage your social impact and support you on the journey to become Net Positive.

 

Call us on +44 (0)1865 591000 or email us to find out how we can apply Natural Capital Accounting to your business or project.

 

Applying Natural Capital Accounting
to your business

We use the latest techniques to help measure and put a value on your dependencies and impacts to environmental resources, including: carbon, water, biodiversity, energy, air emissions, waste and ecosystem services.

We can do this at multiple levels:

 

1) Corporate or business unit Evaluate overall company strategy and operations, for example, to see which sites, activities, products and suppliers present the greatest risks/costs and opportunities/benefits.
2) Programmes or initiatives Assess particular programmes or initiatives, for example, to determine which one(s) to prioritise and where, based on the greatest risks/costs and opportunities/benefits.
3) Projects or
activities
Investigate specific projects or activities, for example, to minimize associated risks/costs and maximize opportunities/benefits.

 

How do we do this?

We have developed a process and set of metrics, including monetary valuation, based on the latest guidelines and methodologies[1] for Natural Capital accounting and assessing net impacts.   The process is set out below.

 

Stage 1: Measure

  • Help determine your objective.
  • Define the scope and boundaries.
  • Identify relevant material impacts (and dependencies).
  • Quantify and value relevant environmental impacts, differentiating between values to your business (and its supply chain) and values to wider stakeholders.

The team at Sustain Value has over 20 years experience identifying, measuring and valuing environmental impacts in a targeted and highly cost-effective manner. ClimateCare will work closely with Sustain Value to help scope out and measure an appropriate set of parameters to guide development of the Plan and selected Change.

Stage 2: Plan

While the results will vary according to the nature of your business,  a recent report: Natural Capital At Risk: The Top 100 Externalities of Business (commissioned by the Natural Capital Coalition) highlights that for most businesses, Green House Gas emissions make up the majority (38%) of their external environmental costs, closely followed by water use (25%) and localised air pollution.

Failure to take action to reduce these costs presents real risks to the business – reducing brand value, customer loyalty, supply chain resilience, impacting local regulation and investment potential.

The ClimateCare team have a 19 year track record of creating and delivering award winning sustainability programmes for businesses around the world. Our programmes are designed to be low risk, consistently delivering results on time and to budget. They are quick and simple to manage while delivering real resonance and value for money.

Depending on your requirements we will work with you to:

  • Scope out requirements
  • Review existing data and set financial, social and environmental objectives
  • Provide a report setting out potential actions, costs and benefits

 

Stage 3: Change

With nearly two decades experience of delivering effective Natural Capital management programmes – including carbon reduction and water programmes, these risks are something that our team are well placed to help you manage and reduce.

We can help you:

  • Assist (as required) with implementation
  • Design and deliver projects to reduce your negative and deliver positive environmental impacts, robustly and cost effectively
  • Measure and report results
  • Monitor and adapt

 

Apply social impact accounting to get the full picture of your businesses’ social, environmental and economic impact.

Contact us to find out how we can apply natural capital accounting to your business or project.

Or alternatively, call us on +44 (0)1865 591000


 

[1] This includes for example, the draft Natural Capital Protocol, A Guide to Social Return on Investment, The London Benchmarking Group, The Gold Standard Water Benefit Standard.