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Why CSOs Can't Escape Action On Natural Capital

Date: 27 October 2014

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28 pages, 8 Figures 

EXECUTIVE SUMMARY

Over the past few years, issues of planetary constraints and resource scarcity have become a greater area of concern for all business sectors. Even with an increase in media attention towards firm use of the natural resources available to them, there is still little understanding of the full impact of natural capital dependencies on businesses. This report helps Chief Sustainability Officers and VPs of Environmental Sustainability to understand the circumstances where natural capital is relevant for their business, the risks involved in ignoring natural capital and the options available to them to implement sustainability strategies that take better account of natural capital. Verdantix analysis, following extensive interviews with industry leaders, identifies drivers forcing corporations to engage with natural capital issues and risks corporations will have to address in order to integrate natural capital into their sustainability strategies. The report also identifies enablers that maximize business benefits, and the twelve steps CSOs need to take to revamp their strategy.

 

TABLE OF CONTENTS

DEFINING NATURAL CAPITAL FOR CORPORATE USE 

Natural Capital Includes The Environment And All Related Services
National Governments Steward The Use of Non-Renewable Resources
Corporates Receive Free Benefits from Renewable Natural Capital
Firms Can’t Escape Discourse on Natural Capital
Analysis Segments Corporates According To Their Reliance On Natural Capital

RISK ANALYSIS AND VALUATION UNDERPIN SUCCESSFUL STRATEGIES 

Natural Capital Is The Root Cause Of Risks Already On The CSO’s Radar
CSOs Need To Question Hidden Business Assumptions
Cascade of Natural Capital Risks Flows All The Way Through Value Chains
Opportunity Risk Is The ’Nice’ Risk To Tackle
Resource Valuations Open The Door For Greater Multiparty Collaborations

NEW ENABLING TOOLS AND MARKETS SUPPORT CORPORATE ACTION ON NATURAL CAPITAL

New Technology Solutions Support Action on Natural Capital
Conservancy Drives Development of Natural Capital Markets
External Experts Support Corporate Navigation Of Resource Stresses
Green Infrastructure Emerges As a Cost-Effective Natural Capital Solution

TWELVE STEPS FOR CSOs TO REVAMP THEIR STRATEGY

TABLE OF FIGURES

FIGURE 1. Definitions Of Terms Associated With Natural Capital
FIGURE 2. Segmentation of Natural Capital By Ecosystem Service Provided
FIGURE 3. Example of Sector Groupings By Natural Capital Reliance 
FIGURE 4. Risks a CSO Will Encounter If Not Thinking About Natural Capital
FIGURE 5. Natural Hazards Create A Cascading Risk Effect Between Industry Sectors
FIGURE 6. 
Natural Capital Challenges A CSO Will Have To Address 
FIGURE 7. Extending A Corporate Sustainability Strategy
FIGURE 8. Natural Capital Stewards Do Not Always Benefit From Resource Management 

ORGANIZATIONS MENTIONED

AECOM, AFNOR, Aggregate Industries UK, American Farmland Trust, American National Standards Institute (ANSI), Anglian Water, Anglo American, Apple, Arcelor Mittal, Avery Dennison, Aviva Investors, Bacardi, Barrick Gold, BASF, Ben and Jerry’s, BJ’s Wholesale Club, Bonsucro, Boots UK, BP, CB&I, CH2M Hill, China Labor Watch, Diageo, Dow Chemical, DuPont, Ecometrica, Ecosystem Investment Partners, Ecosystem Marketplace, eni, Environment Bank, Environmental Markets Task Force (EMTF), Exelon, Facebook, FEMSA, Forest Trends, Freedom Industries, Global Reporting Initiative (GRI), Google, Green America, H&M, Harrah’s Entertainment, Holcim, Honda Motor Company, HP, IBM, ICF International, IKEA, Institute for Ecosystems of the National Center for Research, Inter-American Development Bank, Intergovernmental Panel on Climate Change (IPCC), International Finance Corporation (IFC), International Organization for Standardization (ISO), International Union for Conservation of Nature (IUCN), Kering, Kew Royal Botanic Gardens, Kingfisher, Landmarc, Levi Strauss, Michelin, Microsoft, Mondi, Munich Re, Nestle, Newmont Mining Corporation, Norway Sovereign Wealth Fund, PepsiCo, Peruvian Ministry of the Environment, Pollen Estate, PUMA, Reduced Emissions from Deforestation and Degradation (REDD), Renmatix, Ricoh, Rohm & Haas, Roundtable for Sustainable Soy, Rubicon Resources, SABMiller, San Francisco Public Utilities Commission, Sainsbury’s, SCA Group, Soco International, Sustainability Accounting Standards Board (SASB), The Carbon Trust, The Coca-Cola Company, The Data Center, The Economics of Ecosystems and Biodiversity (TEEB), The Environment Partnership, The Global Legislators Organisation (GLOBE), The Home Depot, The Keystone Alliance for Sustainable Agriculture, The Nature Conservancy, The Walt Disney Company, Toyota, UK Central Science Laboratory, UK Foreign & Commonwealth Office, UK Peatland Programme Commission, Unilever, United Nations, United Nations Environment Programme (UNEP), United Utilities, University of Cambridge Natural Capital Leaders Platform, University of Wisconsin-Madison Center for Sustainability and the Global Environment (SAGE), US Bureau of Land Management, US Congress, US Department of Transportation, US Environmental Protection Agency (EPA), US Forest Service, Volkswagen, Walmart, Weyerhaeuser, World Bank Group, World Business Council for Sustainable Development (WBCSD), World Economic Forum, World Resources Institute (WRI), World Wildlife Fund (WWF), Wyndham Hotels & Resorts