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Archive for March, 2014

This is a post by Molly:

Why is natural capital important for business? Whilst the concept has received renewed attention in recent years, many fundamental questions remain, including:

  • What is natural capital?
  • Why is accounting for it important to the economy and to business?
  • How can we account for it?

The first of these is perhaps the easiest to answer. As a concept, natural capital essentially describes the parts of the natural environment on which we as individuals and businesses depend. When you think about it, this is pretty much everything around us. Particular parts of the natural environment will be important inputs to achieving the businesses objectives of companies, with different parts being important according to the objectives of the firm and its position within the economy.

 

Given this, the short answer to the second question is therefore that we should account for natural capital because it is important. If your business or the industry in which it operates depends on nature in any way (and it probably does more than you think), then you would want to know whether this dependency is at risk.

 

Analysing whether this risk exists, how big it is, what are its potential implications on your business’ bottom line and what can be done about it, are therefore important questions.

 

You would also want to know if there are any opportunities to use natural capital more efficiently.. Adjusting business models given potential risks to the natural capital on which your business depends presents an opportunity to reduce costs in the long term.

 

Finally you would also want to know what, if anything, you should put aside for investing in maintaining, and even enhancing natural capital, to ensure it can continue to provide benefits for your business. In other words, you would want to know the cost of maintaining natural capital to sustain the current uses.

 

The output from such analysis forms the basis of business accounting for natural capital.

 

To find out more about the ongoing work to answer questions such as these sign up to the Natural Capital for Business workshop on Thursday 3rd April 2014, 1.30 to 6.30pm, Bloomsbury House, London

 

The event is free but places are limited. For registration please email uknee@uknee.org.uk

 

This event is jointly run by the UK Network of Environmental Economists, University College London Centre for Biodiversity and Environmental Research, financially supported by Natural Environment Research Council and endorsed by the Natural Capital Initiative.

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