Insights
Why central banks should be concerned about nature loss BY Maud Abdelli, Chiara Colesanti Senni, Adrian von Jagow
Five ways to foster insurance solutions for biodiversity BY Samantha Cook, Susan Holliday
Climate finance and the peace dividend: A co-benefits argument BY Catherine Wong
Natural capital is the world's stocks of natural assets. This includes geology, soil, air, water and all living things. The economy derives a wide range of services from natural capital, sometimes called ecosystem services.
Ecosystems thus present crucial opportunities in terms of marrying economic growth and environmental conservation. Numerous initiatives, including The Economics of Ecosystems and Biodiversity (TEEB) and Wealth Accounting and the Valuation of Ecosystem Services (WAVES), seek to help policy makers and practitioners incorporate the “living fabric” into development planning, accounting and decision-making.
Relevance to SDGs
Sustainable Development Goal (SDG) 15 covers loss of natural capital. In particular, goal 15.5 covers halting the loss of natural capital and 15.9 emphasizes the integration of natural capital values into national and local planning, development processes, poverty reduction strategies and accounts.
Explore green growth resources related to SDG 15:
Tackling biodiversity loss and adapting to climate change requires increasing protection of, and investment in, natural capital. Natural capital consists of assets such as water, forests, clean air, flora and fauna, which provide services like water catchment, erosion control and crop pollination. These services are vital to the global economy but are under increasing threat from factors such as pollution, overuse and climate change.
Through their banking, investment and insurance activities, financial institutions impact and are dependent upon natural capital, either directly or indirectly through the companies they finance. This interaction delivers both costs and benefits which creates risk and opportunities. Investors are facing different types of natural capital risks, such as the cost of the loss of ecosystem services, environmental regulation and reputational risk. Those risks can be mitigated by integrating natural capital considerations into risk management processes.
There are several natural capital-related initiatives aimed at the finance sector and the Natural Capital Finance Alliance provides tools and guidance for finance professionals.
Natural capital is the world's stocks of natural assets, including plants, soil, air, water and all living things. Businesses are dependent on natural capital. The Economics of Ecosystem and Biodiversity (TEEB) found that insect pollinators contributed up to $190 billion per year to the agriculture sector’s economy alone.
There is increasing recognition that new business models are needed which work to sustain natural capital while also meeting the needs for better products and services. A number of initiatives exist to support businesses achieve these objectives, including the Natural Capital Coalition (NCC). The NCC and its partners have developed a Natural Capital Protocol that helps businesses identify, measure and value their direct and indirect impacts and dependencies on natural capital.
Research
Case Studies
