Natural Capital can be defined as the world's stocks of natural assets that include geological resources, soil, air, water and all living things. It is from this natural capital that humans derive a wide range of services, often called ecosystem services, which make human life possible.
Preventing what I have previously called the 'Natural Capital Debt Bubble' from growing and eventually bursting on a -- not so unsuspecting -- world will require the widespread application of natural capital accounting by both private and public sectors. Yet, despite a compelling economic and ecological case for addressing the loss and degradation of global ecosystems, the mainstreaming of such accounting methods is not happening at the speed required. How then can we accelerate the understanding and adoption of natural capital by businesses and governments around the world?
One of the big themes to emerge from the first World Forum on Natural Capital in November 2013 was that such mainstreaming cannot be achieved by one sector alone; it will require novel collaborations between a host of players traditionally uneasy about working together. Mixing this tricky cocktail will be difficult but the end product will be well worth it for our security, prosperity, long-term business profitability and the future of the millions of species with which we share this fragile planet.
This particular cocktail needs six ingredients.
Ingredient 1: Clear and consistent messages on the importance of natural capital from civil society organizations
Too many non-governmental organizations remain ideologically opposed to the corporate sector and willfully fail to see the opportunities that transparent and honest natural capital accounting approaches could have for people, planet and, yes, profit. Civil society organizations from environment, development, humanitarian and other fields should draw up a simple 'Natural Capital Charter' with a set of principles on which all are agreed. This doesn't mean NGOs shouldn't robustly hold irresponsible businesses to account, but does mean constructively working with those genuinely willing to change.
Ingredient 2: A common framework for corporate natural capital accounting
Without a common approach to natural capital accounting it is impossible to compare the relative impact and dependencies a business has on the natural environment. The emerging Natural Capital Protocol being led by the International Union for Conservation of Nature (IUCN) and the World Business Council for Sustainable Development will create a transparent, comparable and accountable methodology.
Ingredient 3: Ensure academic research drives action
There has been a research explosion in recent years on the measurement and management of natural capital (stocks) and ecosystem services (flows). This research has sometimes been too theoretical to be useful to practitioners, or else lacking the political and practical dimension needed to translate to impact on the ground. It is vital that funds being spent on research answer practical questions and provide technical tools, such as remote sensing of land use change, needed for the development of a robust Natural Capital Protocol for example.
Ingredient 4: National legislation on natural capital supported by international standards
Perhaps the most important ingredient in the cocktail is for sovereign states to legislate to ensure a level playing field for businesses but also set out what action government's themselves will take on, for example; ecosystem assessments, natural capital restoration targets and application of accounting standards such as the UN's System of Environmental-Economic Accounting.
Ingredient 5: More leaders from big and small businesses
Though awareness is growing, there are still far too few companies whose CEOs have embraced natural capital accounting and are leading the charge. We need more Puma's, Unilever's and Kingfisher's to be shouting about the win-wins to be gained. Many more small businesses should also be using simple natural capital analysis to improve their CSR and to cut costs.
Ingredient 6: Shake and serve
This cocktail of NGOs, academics, politicians, civil servants, business leaders, accountants and finance professionals is a new one on the menu. In Scotland, the Scottish Forum on Natural Capital has brought exactly this mix together and we are busy exploring practical ways of restoring Scotland's natural environment in a way that will benefit all of us, and be good for business.