Natural Capital And Ecosystem Services

October 31, 2019 | Guidance

Many businesses are aware that natural capital assets and the ecosystem services they provide underpin prosperous economies and societies. In practice, however, it is not always clear how and to what extent their commercial activity depends on the natural world. This means risks and opportunities can go unidentified, unvalued and unmanaged, leaving businesses exposed to regulation, legal action and brand damage.

To address this challenge, it’s recommended that companies undertake a natural capital assessment to deliver strategic insights. Additional value can be unlocked by identifying operational improvements and successfully communicating an organization’s positive impacts on ecosystems and society.

This is particularly relevant in light of emerging policy such as the UK’s 25 Year Environment Plan, Green Finance Strategy and Environmental Land Management Scheme, which demonstrate the Government’s intention to align environmental management, agricultural payments and reporting with natural capital-based approaches.

What do we mean by natural capital?

Just like the buildings and bridges of the human environment, the natural world has its own ‘assets’ such as trees, rivers and wildlife. Citizen and economies fundamentally rely on the many complex things that these natural assets do, whether it’s the rivers that provide water, power and transport or the pollenating insects that ensure our crops grow. These ‘ecosystem services’ performed by the environment’s ‘natural assets’ are extremely valuable.

A natural capital approach aims to measure that value in various forms. It looks at the ways in which we depend on the natural environment, as well as how humans impact it.

Our approach and services

Anthesis works with businesses across a range of sectors to better understand, evidence and assess their environmental impacts and dependencies. By coupling our environmental economics expertise with a knowledge of agriculture, supply chains and software, we support them to create natural capital strategies to protect and enhance ecosystem services.

We assess nature-related financial risks and opportunities, building on our experience of working with companies to assess the risks arising from climate change in line with the requirements of the Taskforce on Climate-related Financial Disclosures.

1. Impacts and dependencies analysis

2. Supply chain analysis

3. Software, metrics and data visualization

4. Strategy and reporting

5. Stakeholder engagement and implementation

Fiona Place
Associate Director and Climate & ESG Practice Lead, UK

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