#NatCapProtocol Natural Capital Protocol Standard presentation deck

2 How to use this slide deck – Delete this slide This slide deck has been produced to support workshops and presentations by Coalition Organizations about the Natural Capital Protocol and accompanying sector guides. Slides can be deleted and reordered to be suitable for your presentation More information is available on the Coalition website - If you have questions about the slides or have improvement then please let us know at

3 NATURAL CAPITAL COALITION

4 Science and academia Conservation bodies & NGOs Business Membership Organizations Policy Finance Standard Setters & disclosure Who makes up the Coalition? Putting the puzzle together The Coalition is purpose driven, bringing together a wide range of stakeholders who agree to collaborate on activities to help create a world where business conserves and enhances natural capital.

5 WHAT IS NATURAL CAPITAL?

6 What is natural capital? Natural Capital is the stock of renewable and non-renewable natural resources, (e.g. plants, animals, air water, soils, minerals) that combine to yield a flow of benefits to people

7 What are the other capitals? There are several commonly recognized forms of capital. It is natural capital that supports all of the other forms of capital and underpins thriving societies and prosperous economies. All capitals are interconnected and it is impossible to completely separate any one form of capital from the others. The capitals framework

8 NATURAL CAPITAL PROTOCOL AND SECTOR GUIDE DEVELOPMENT

9 Harmonization There are many different approaches to natural capital and a lot of work has been carried out already. The Natural Capital Protocol standardizes this into a single global framework

10 8 Adoption Factors -Accessible -Flexible -Aligned -Credibility -Relevance -Comparable -Decision-useful -Unlocks value 6 Primary Uses -Strategic planning and decision making -Supply chain risk- assessment -Capital allocation -Investment decision making -Operational decision making -External reporting 4 Benefits -Improved risk management -Better decision making -Increased competitive advantage -Balanced and comparable reporting Establish a clear framework that is…...that conveys…...and drives meaningful results… 80+ businesses from 15 sectors and all geographic regions We asked business what they needed

11 Developed the ProtocolDeveloped the sector guides, and managed the business engagement and pilot testing A unique collaborative process The Coalition is hosted by ICAEW.

12 Over 50 businesses contributed to the Protocol piloting program Deep Dives Piloted the entire Protocol Piloting companies Piloted different steps of the Protocol Leading companies tested the draft Protocol

13 Draft Protocol and sector guides released in November 2015 for consultation The consultation was carried out using the online collaboration tool Collaborase Consultation  3,230 comments  453 individuals  143 organizations  5 continents covered  22 countries covered

14 NATURAL CAPITAL PROTOCOL

15 Introducing the Protocol There are many existing approaches that businesses will be using to measure and value their impacts and dependencies, inform their decision making and strategy, and engage with stakeholders. The Natural Capital Protocol is complementary to all of these and provides a standardized framework to help include natural capital in decision- making.

16 Introducing the Protocol There are many existing approaches that businesses will be using to measure and value their impacts and dependencies, inform their decision making and strategy, and engage with stakeholders. The Natural Capital Protocol is complementary to all of these and provides a standardized framework to help include natural capital in decision- making. While there are national level accounting initiatives such as the UN System of Environmental Economic Accounting (SEEA) implemented by governments, through for example, the World Bank led Wealth Accounting and Valuation of Ecosystem Services (WAVES) global partnership, the Natural Capital Protocol is focused at a business decision-making level and can be implemented across boundaries.

17 The Natural Capital Protocol is a standardized framework for business to identify, measure and value its direct and indirect impacts and dependencies on natural capital Introducing the Protocol

18 The Protocol is a framework designed to help business generate trusted, credible, and actionable information for business managers to inform decisions For business to make better decisions What are the natural capital risks and opportunities in your business? Operational Legal and regulatory Financing Reputational and marketing Societal

19 What the Protocol does and does not do The Protocol…The Protocol does not… Builds on existing tools, guides, methods and techniques Focuses on improving internal management decision making Provides a standardized process that is also flexible Provides a process to internally standardize the approach that you take  Seek to create new tools and methods  Provide a framework for external financial reporting  Explicitly promote specific tools, methodologies or approaches  Necessarily produce results that are comparable within or between different businesses or applications

20 The Natural Capital Protocol is a standardized framework for business to identify, measure and value its direct and indirect impacts and dependencies on natural capital The stock of renewable and non-renewable natural resources (e.g. plants, animals, air, water, soils, minerals) that combine to yield a flow of benefits to people Definitions

21 The Natural Capital Protocol is a standardized framework for business to identify, measure and value its direct and indirect impacts and dependencies on natural capital Internationally applicable across all business sectors, geographies and scopes ; leverages existing approaches Definitions

22 The Natural Capital Protocol is a standardized framework for business to identify, measure and value its direct and indirect impacts and dependencies on natural capital Aimed at informing business decision making with trusted, credible and actionable information Definitions

23 The Natural Capital Protocol is a standardized framework for business to identify measure and value its direct and indirect impacts and dependencies on natural capital To measure: determine the amounts, extent and condition of natural capital, in physical terms, e.g. m3, tons To value: estimate the relative importance, worth, or usefulness of natural capital to people / business, in a particular context. Can be qualitative, quantitative or monetary Definitions

24 The Natural Capital Protocol is a standardized framework for business to measure and value its direct and indirect impacts and dependencies on natural capital Impact: negative or positive effect of business activity on natural capital Dependency: A business reliance on or use of natural capital Definitions

25 The Natural Capital Protocol Framework

26 The Stages are connected and iterative

27 The Protocol is underpinned by Principles Relevance Ensure that you consider the most relevant issues throughout your natural capital assessment including the impacts and/or dependencies that are most material for the business and its stakeholders Rigor Use technically robust (from a scientific and economic perspective) information, data, and methods that are also fit for purpose. Replicability Ensure that all assumptions, data, caveats, and methods used are transparent, traceable, fully documented, and repeatable. This allows for eventual verification or audit, as required Consistency Ensure the data and methods used for an assessment are compatible with each other and with the scope of analysis, which depends on the overall objective and expected application

28 Get started: Conceptual model

29 Get started: Conceptual model

30 Get started: Conceptual model

31 IMPACT AND DEPENDENCY PATHWAYS

32 Impact pathway

33 Impact pathway

34 Impact pathway

35 Dependency pathway v v v

36 Dependency pathway v v

37 Dependency pathway

38 SECTOR GUIDES

39 Which sectors? The Coalition will develop new guides in partnership with sector initiatives and associations Under development: Real Estate Finance Water Apparel Food & Beverage Protocol

40 How do the sector guides support the Protocol? The sector guides… Provide context on why natural capital is relevant to businesses operating in the sector and how they benefit from it Develop the business case for natural capital assessments Identify natural capital impacts and dependencies relevant to businesses operating in the sector Use practical examples to demonstrate sector-specific business applications of the Protocol

41 What does this look like in practice?  The sector guides follow the Protocol framework exactly and do not introduce any additional Stages or Steps  The sector guides provide additional guidance on the actions within each Step that are most relevant to the sector  As such, the sector guides should be used alongside the Protocol rather than in isolation

42 Example materiality matrix from the food and beverage sector guide

43 PRIMER

44  A short introduction to the Natural Capital Protocol and sector guides  Sets out why applying the Protocol and including natural capital in your considerations will improve decision making Primer

45 The business case

46 CASE STUDIES AND EXAMPLES

47  Decision we wanted to influence:   Business application:   Impacts and dependencies:   Business boundaries:   Material issues:   Methodological approach:   Result:   Integration in the business:  Include your own example here

48  Decision we wanted to influence:  Enhance the business model for Indian sugar production  Business application:  Compare options  Assess impacts on stakeholders  Estimate total value and/or net impact  Impacts and dependencies:  Climate change  Natural Capital (land, water, soil)  Farmers  Sugar mill  Business boundaries:  Product  Material issues:  Productivity  Water  Soil  Temperature  Methodological approach  Quantitative, qualitative and monetary  Result  Farmer productivity  28%  Water use  28 billion litres  Integrated in the business

49  Decision we wanted to influence:  Product & process innovation  Supply chain (sourcing, location and logistics)  Business application:  Compare options  Assess impacts on stakeholders  Estimate total value and net impact  Communicate internally and externally  Impacts and dependencies:  Impacts  Business boundaries:  Whole value chain considered (supply chain, manufacturing, distribution, use, end of life)  Corporate  Product  Material issues:  GHG  Air pollution  Water consumption  Methodological approach  PwC EP&L Methodology - External societal costs of production and products use  Result  2013 EP&L: R$ 132m  Consumer use phase: R$ 455m  Integration in the business  Roll out to the performance management processes  2020: ESP&L / 2050: Positive Impact  Water pollution  Land use  Solid waste

50  Decision we wanted to influence:  Operational decision-making on process and materials within our Group  Business application:  Assess risks and opportunities  Compare options  Assess impacts on stakeholders  Estimate total value and/or net impact  Communicate internally or externally  Impacts and dependencies:  Business boundaries:  Corporate – the entire business  Material issues:  Carbon emission  Water use  Water pollution  Land use  Air pollution  Waste  Methodological approach  Align our existing EP&L approach to the NCP through collaborative engagement & open-sourcing  Result  Implementation of EP&L analytics has supported our brands decision- making methods  Integration in the business  Group-wide approach including standardized EP&L system and analytics  Supporting our brands with EP&L analysis on demand Impacts Dependencies

51 SUPPORTING THE PROTOCOL

52 Natural Capital Hub Providing a link to everything natural capital Searchable database of events, case studies, news stories and much, much more.

53 Sector Guides Developing further sector specific guidance to support the application of the Protocol Enabling Environment A regional workshops program that builds on the business and country pilots Natural Capital Data Framework Framework guidelines, developed through collaboration, on how to navigate the complex world of natural capital data and information Protocol Application Program Program to support the use of the protocol, with mentoring, support services, workshops and an annual conference Future work of the Coalition

54 The Program aims to encourage the uptake of the Protocol by business, providing support, materials and shared learning to those applying it To join the Protocol Application Program go to The Protocol Application Program will be led by CISL on behalf of the Coalition Protocol Application Program

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