Biodiversity and natural capital

Framing nature as ‘natural capital’ is a way of looking at the environment from an economic perspective, with living and non-living elements of the environment seen as a ‘stock’ or an ‘asset’ from which numerous benefits flow in the form of ecosystem services. Recognising these benefits allows values, sometimes financial, to be associated with them. Whilst a wholly anthropocentric way of looking at the environment, this approach can be useful for influencing decisions driven largely by economic thinking (as most decisions in business and government are) as it allows some of the values of nature to be represented in equivalent terms.

A number of initiatives are making great progress in using natural capital approaches to better integrate the value of nature into accounting and decision making. The Natural Capital Protocol is rapidly gaining acceptance as the standard approach for businesses looking to better understand their relationships with the environment, whilst the World Bank WAVES partnership and the UK Natural Capital Committee represent two of the initiatives focusing on government accounting and management of environmental assets.

However, one of the challenges of these approaches is the incorporation of biodiversity. Biodiversity – the diversity of all living organisms at genetic, species and ecosystem level – forms the living component of natural capital stock. It is the interactions between biodiversity and non-living natural resources that generate most of the flows that benefit society. Some of these benefits can be measured and valued, but many remain hidden or missing (see paper below). Natural capital assessments are increasingly gaining acceptance as a way of integrating the financial implications of water management and carbon emissions into decision making, but unless the challenges of adequately capturing the same values from biodiversity are met there is a risk they will be excluded altogether.

Project Aims

To improve the incorporation of biodiversity into natural capital assessments.

Key Activities

The initial focus of the project is to focus on natural capital assessments within business. Working in partnership with the Natural Capital Coalition, CCI partners are working to: 

• Identify the key stakeholders with an interest in addressing biodiversity in natural capital assessments
• Specify the reasons integrating biodiversity into natural capital assessments is so challenging the requirements for addressing these
• Generate guidance documents, training and associated products to complement the Natural Capital Protocol
• Test the proposed solutions and driving change at scale

Discussions are also underway to ensure biodiversity is similarly represented in government-led assessments of natural capital. 

Conservation Impact

Economically-driven decisions that do not consider nature are one of the primary drivers of the loss of species and natural habitats. Natural capital approaches are one way of capturing some of the importance of nature and translating this into economic terms that can be understood and factored into decision making by companies and governments. The uptake of such approaches is increasing fast. Done well, this represents a significant opportunity for conservation. Done poorly it represents at best a missed opportunity and at worst an additional threat. By working to ensure such approaches adequately incorporate biodiversity we intend to maximise the impact of a potentially important tool for addressing the impacts of economic activity on nature.