With increasing pressure on natural resources and the accompanying impact on the environment, more businesses are beginning to realize the importance of properly valuing the natural resources upon which they depend. To do this they need to include ‘natural capital’ in their decision-making processes alongside other forms of capital, such as financial and human capital. The challenge for companies is a lack of data, tools and processes to facilitate business decision making in a rigorous and consistent way.
Two years in the making, the Natural Capital Protocol – launched earlier this month – is a framework developed by the Natural Capital Coalition to help businesses identify, measure and value their direct and indirect impacts and dependencies on natural capital. Over the last 18 months the Cambridge Institute for Sustainability Leadership (CISL) - a part of the University of Cambridge dedicated to building strategic leadership capacity to tackle critical global challenges - has managed a pilot Program on behalf of the Coalition with over 50 companies including Coca-Cola, Hugo Boss, Jaguar Land Rover, Kering and Nestlé, testing the business relevance and usability of the Protocol. The impacts of these pilot tests on individual businesses are revealed in a new CISL-authored report, Business Insights: Pilot testing the Natural Capital Protocol, launched today by the Natural Capital Coalition.
The report shows that even the pilot testers were seeing immediate uses for the Protocol. 60 percent of respondents said that piloting the Protocol has enabled them to be more confident in engaging industry stakeholders around natural capital, and some businesses used their pilots to inform their approach to investment planning or procurement decisions.
Following the successful pilot, which generated the interest of hundreds more businesses and the support of finance, conservation, science, standard setting and policy communities, the Natural Capital Coalition has high ambitions for the Protocol Application Program. Designed and led by CISL and open to businesses of all sizes worldwide, the Application Program will encourage wider use of the Protocol by companies that have not yet engaged with the framework. It will also provide an opportunity for existing pilot testers to make further progress in incorporating natural capital into their decision making.
“It is crucial for business leaders to consider natural capital in their decision making but they need support to do this effectively,” said Dr Gemma Cranston, Senior Program Manager at CISL. “We are delighted that CISL has been asked by the Coalition to run the Protocol Application Program, drawing on our experience of working with policy makers, academia and business to co-create solutions to real world problems. The Program will not only provide much needed support to companies through webinars and materials - but will also enable shared learnings and best practice in an area that is still relatively new and unexplored for most businesses.”
The Protocol Application Program will:
- Support the application of the Natural Capital Protocol though a regular webinar series and support materials.
- Provide dedicated training and technical advice to support the application of the Protocol.
- Deliver a structured approach to collecting feedback to set out the business case for applying the Protocol and integrating natural capital into business decisions.
- Enable effective sharing of experiences between businesses, including the hosting of a two day event each year.
- Assess the impact/change generated by businesses using the Protocol.
“Working with CISL on the Natural Capital Protocol has helped us to set clear priorities for interventions in the highest-impact value chains,” added Ian Ellison, Sustainability Manager at Jaguar Land Rover. “We look forward to deepening our insights, taking this work to the next level and sharing best practice with others through the Protocol Application Program.”
“We had open-sourced our Environmental Profit and Loss (EP&L) accounting methodology and supported CISL’s pilot program so that initiatives like the Natural Capital Protocol can scale across business sectors,” said Michael Beutler, Director of Sustainability Operations at Kering. “We look forward to our continued collaboration with CISL on this next phase of program implementation to support other companies adopting natural capital accounting methods like the EP&L.”
Businesses of any size can join the Protocol Application Program. To do so, they must simply express interest by completing the form available here.