Representatives from over 160 of the world’s leading organizations, spanning business, finance, accounting, conservation, academia, and policy, have met on 13 July in London to celebrate the culmination of a unique collaborative project that has produced the first global Natural Capital Protocol.
The Natural Capital Protocol is a standardized framework designed to generate trusted, credible, and actionable information that business managers need to make truly informed decisions. It brings together and builds on a number of approaches that already exist to help business measure and value natural capital, and, by harmonizing them, will allow all businesses everywhere to benefit from understanding their relationships with nature.
The Protocol represents public and private sectors coming together in a unique collaboration, under voluntary contracts, to create something for the common good, and is freely available to all under a Creative Commons license.
38 diverse organizations formed the Protocol’s core development team (see notes), and over 450 organizations provided input over the course of the two year project. With the global challenges we face, such collaboration through voluntary partnerships will become ever more crucial, and the Protocol is proof of what can be achieved.
According to a 2013 report commissioned by the Natural Capital Coalition, half of all existing corporate profits would be at risk if the costs associated with natural capital were to be internalized through market mechanisms, regulation or taxation. A water shortage, for example, would have a catastrophic impact on 40% of Fortune 100 companies.
Natural capital brings together the environmental strands of climate, water, energy, biodiversity and waste into a uniform strategic approach. If adopted at scale, the Natural Capital Protocol has the power to revolutionize the way that businesses evaluate their operations and make decisions, helping them to reduce pollution, protect biodiversity, and limit the impacts of climate change, while simultaneously producing positive business results, safeguarding operations and supporting efforts to create a more sustainable world.
The Protocol has been through a comprehensive consultation and piloting process. Organizations and professionals from six continents offered over 3,200 comments during the consultation, and over 50 leading businesses piloted the Protocol, including Dow, Shell, the Coca-Cola Company, Kering, Hugo Boss, Yorkshire Water, Nestle, Interface, Olam and Nespresso, with many more lining up to apply the Protocol once it is launched.
Mark Gough, Executive Director of the National Capital Coalition, said: “The Natural Capital Protocol will allow all businesses around the world to realize the benefits of including nature in their decision making. It has been amazing to see how a community can come together at a time of need and collaborate to produce something for the common good. Now we have a standardized framework, it is time for action.”
Peter Bakker, President and CEO, World Business Council for Sustainable Development (WBCSD) said; “The days of defining business success by financial metrics alone are over. As we move to fulfil the Paris Agreement and achieve the SDGs, business will need to take an holistic view and start including information on natural and social capital in the definition of performance. The Natural Capital Protocol will help companies make better, more informed decisions, and I am extremely proud that WBCSD has had the honor of leading the development of the Protocol on behalf of the Coalition”.
Inger Andersen, Director General, International Union for Conservation of Nature (IUCN) said; “For business to fully contribute to global sustainable development, it must be able to value and measure its natural assets. The Natural Capital Protocol is a potential game changer in the way businesses operate. We look forward to introducing it at the IUCN World Conservation Congress this September in Hawai‘i, where business, finance, the conservation community and governments will explore how the Protocol can contribute to better conservation outcomes.”
Michael Izza, CEO, Institute of Chartered Accountants in England and Wales (ICAEW) said; “It has been wonderful for ICAEW to be so closely involved in the Natural Capital Coalition. How we preserve the capital stock of nature is the most important question we face today; without nature there is nothing. The Accountancy Profession has a huge role to play in this endeavour. Without clear information on their impacts and dependencies on nature, it’s very difficult for businesses to take real action. The Natural Capital Protocol will provide this information, and accelerate the shift towards a more sustainable future.”
Peter Seligmann, Chairman, CEO and Co-founder of Conservation International said; “The urgency of addressing climate change requires innovations across all sectors of society. This is why Conservation International strongly supports the innovations of the Natural Capital Protocol. Their breakthrough methodology provides Businesses with the tools to understand their dependency on nature and their impact on nature. This is essential if they want to achieve sustainability. It is a challenge that enlightened business leaders should undertake for their bottom line, as well as for the interest of humanity and the preservation of the benefits we all receive from nature: fresh air, clean water and food production.”
Protocol pilot testers said;
Liz Barber, Group Director of Finance and Regulation, Kelda Group (Yorkshire Water) said; “It is increasingly apparent that traditional financial accounting practices are failing to recognise all relevant business impacts and risks. The natural capital Protocol is a real world first in bringing structure and a standardised common framework for natural capital assessment.”
Chris Brown, Vice President – Corporate Responsibility & Sustainability, Olam International (UK) Ltd said; “I believe business and commerce should use the Natural Capital Protocol to embed the holistic decision making necessary to not only manage risk, but more importantly deliver corporate culture change.”
Connie Hensler, Director, Corporate LCA Programs, Interface said; “[By undertaking a natural capital assessment, we] learned where [our] most important impacts and vulnerabilities are, and this provided a clear focus for driving improvement in the company’s impact”.