There may be a way to go before ‘natural capital’, the concept of recognising the value of the natural world and the benefits that flow from it, is used as readily as financial capital in decision making by businesses and governments.
But Mark Gough, CEO of the Capitals Coalition and a speaker at this year’s AIWW Integrated Leaders Forum, can see both the need for the approach and that it is gaining ground fast.
“In 2012, at the time of the Rio+20 event, there were around 40 different approaches using the metaphor of capital to think about our relationship to nature,” says Gough. “Those were harmonised in one internationally-accepted framework – the Natural Capital Protocol – under the umbrella of the Natural Capital Coalition, and over 50,000 organisations around the world now have a copy.”
The Natural Capital Protocol: framework for water-focused organisations
Gough sees that the framework builds on approaches such as Triple Bottom Line accounting and environmental management standards, which are often founded on making measurements, in a way that can better inform decisions. “We have never really had a process to help with decision making,” he says. “We have this idea that measurement means management. I don’t agree with that. Measurement means we get some numbers. The really important thing with the natural capital approach is that it helps understand the context of the numbers so that we can actually act upon them.”
“For the organisations from the 50,000 who are starting to see how the framework might be applied, many include a focus on water,” says Gough. “Water is fundamental to so many different processes.” This includes a direct focus on water, or an indirect one through issues such as climate change and biodiversity. “Water is fundamental within all of those,” he adds.
“The important thing about capital thinking is that it really makes it possible to see the trade-offs between different issues for the first time,” says Gough. Capital thinking includes natural capital as well as the wider consideration of other types of capital, such as social and human capital. For water, it offers a valuable tool for looking across watersheds. “You need to be able to look across an entire watershed if you want to address water-related issues. This is where you need to have some way of reaching agreement about the contextual value of the water,” he says.
Better information, better solution
This underlines the value for Gough of speaking to the mixed Integrated Leaders Forum audience including city, utility and industry leaders. “In the Coalition, we try to be systemic in the way we approach things,” he says. “When we bring groups together, the solutions we find are the ones that actually make a difference. Therefore the idea of having all of these parties together, I don’t think is important, I think it is essential.”
Gough’s advice for starting to work with the framework is to focus on a need. “What is the question you have that you want to inform, where you feel you do not have the information you need?” he says. “If you can identify what that challenge is, and then take it through this process, everyone we have worked with so far has been able to gain better information to inform a better decision.”