Natural Capital is the stock of renewable and non-renewable natural resources that combine to provide benefits to businesses and people. The concept of natural capital is increasingly being recognised as important to the private sector.
Natural Capital Accounting – Forward thinking businesses are already using natural capital analysis and accounting techniques to make better, evidence-based decisions for their future profitability and sustainability. This approach helps them to understand what percentage of their profits directly related to natural capital and where environment-based risks exist. The final step is identifying what future natural capital investments are needed to mitigate or adapt to these risks.
“Our work not only shows that the economic returns of environmental investment are comparable and sometimes greater than those of conventional infrastructure investment, but also that the cost of not acting can be huge”
– Final Natural Capital Committee Advice to Government (September 2015)
Natural Capital Investments in North East England
Providing a mechanism to support business investment in natural assets to minimise risks to assets and to undertake ‘carbon take back’ (removing CO2) from the atmosphere through landscape restoration and change, is an opportunity for North East of England. The local landscape is ideal for this approach and the offer becomes more attractive given the changes to farming and landowner subsidies that will follow Brexit. In future payments will be made for supporting the environment and the provision of ecosystem services. Natural Capital Investment Plans (developed by the Nature Partnership and stakeholders) will be central to guiding these landscape scale changes, habitat enhancements and mitigation opportunities, thereby creating environmental growth and attracting investment.
Businesses with diverse interests realise the pursuit of sustainable processes up and down supply chains can translate into immediate savings and opportunities for innovation. In addition, global challenges including water scarcity, severe weather events, and ecosystem degradation – coupled with a growing interest from consumers and investors in whether companies have a “green” agenda – signal that the environment will have an increasingly direct impact on companies’ earnings and risk profiles.