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Investing in Natural Capital

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Presentation on theme: "Investing in Natural Capital"— Presentation transcript:

1 Investing in Natural Capital
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2 “Natural Capital is the stock of natural ecosystems on Earth including air, water, land, soil, biodiversity and geological resources. This stock underpins our economy and society by producing value for people, both directly and indirectly.”

3 It is the extension of the economic notion of capital (manufactured means of production) to goods and services relating to the natural environment • Structure and diversity of the system are important because the flow of services from ecosystems requires that they function as a whole

4 Natural capital may also provide services like recycling wastes or water catchment and erosion control

5 The Value of Natural Capital
If we were running a business with the biosphere as our major asset, we would not allow it to depreciate. We would ensure that all necessary repairs and maintenance were carried out on a regular basis

6 Current Situation Biodiversity and ecosystem services are on decline globally Increasing gap between the demand for natural resources (ecological footprint), and the environment’s ability to replenish those resources (biocapacity) is widening.

7 For the last few decades, global demand on natural capital has exceeded the ability of many ecosystem services to regenerate. Biocapacity deficit can only be made up by importing natural resources or by continuing to deplete natural capital (significant economic and environmental implications)

8 Natural Capital And National Income
Many governments, civil society, and the private sector are looking toward a future where incorporating natural capital into national accounts can support better decisions for inclusive development

9 Natural Capital And National Income
Natural capital accounting can provide detailed statistics for better management of the economy i.e. land and water accounts can help countries interested in increasing hydro- power capacity to assess the value of competing land uses and the optimal way to meet this goal

10 Why to Invest in Natural Capital
By 2050 agricultural production demand will grow by about 60%, with increasing wealth projected to boost annual demand for meat products by 76%”

11 Why to Invest in Natural Capital
Nature provides trillions of dollars worth of inputs vital to long-term business success Ecosystems are critical to business success, but we are allowing them to collapse

12 Why to Invest in Natural Capital
The over-exploitation of natural resources, uncontrolled land use change and a general underestimation of the socio-economic value of the environment sector have resulted in a biodiversity crisis The global economy is losing more money from the disappearance of forests than through the current banking crisis

13 Why to Invest in Natural Capital
An EU-commissioned study puts the annual cost of forest loss at between $2 trillion and $5 trillion Companies need to start investing in eco-markets; “if they want to stay in the black, they’ll have to get in the green.”

14 Why to Invest in Natural Capital
“will require an estimated increase in the global food crop area of about 1 million km2 ”

15 Why to Invest in Natural Capital
“Over half the world’s river basins, containing 2.7 billion people, face water scarcity at least one month per year”

16 So there is a need in investment, in order to preserve biodiversity and ecosystems

17 How to invest in Natural Capital?
In making a distinction between renewable (solar energy and wind power) and non-renewable (Fossil fuels) resources In considering this investment, as part of a global, international or common investment – long term impacts

18 How to invest in Natural Capital?
Incorporate natures value into the cost of conducting business. A matter of managing risk and managing our supply chains, putting a value of the cost to nature

19 Framework for Action State led natural capital valuations & mapping
Assess your company’s impacts and dependencies on ecosystems Put a price on nature’s value Optimize resource use to minimize environmental degradation Invest strategically in conservation and restoration

20 Innovate in materials, processes and products
Build natural instead of manmade infrastructure Encourage new natural capital markets and investment tools

21


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