New Metrics
Natural Capital Coalition Releases Stakeholder Feedback Report, Draft Protocol

The Natural Capital Coalition has released an extensive report on business expectations around the Natural Capital Protocol, its standardized framework for measuring impact and dependence on natural ecosystems. Due to be published next year, the Protocol will provide decision-making support to businesses in their risk-management processes, exploration of new revenue streams, and in product and value chain innovation.

The report reflects the opinions of businesses across 15 sectors on dynamics they expect to influence their adoption and use of the Protocol. Extensive interviews conducted by EY were undertaken from February to March of this year, revealing key factors that could drive uptake: establishing a clear framework that is accessible, flexible, and aligned; ensuring the framework is credible and relevant; and ensuring the framework can drive comparable, decision-useful results that “unlock value.”

Responses indicated six primary intended applications: strategic planning and decision-making, supply chain risk assessment, capital allocation, investment decision-making, operational decision-making, and external reporting. They also indicated four main areas of anticipated benefits: improved risk management, better decision-making, increased competitive advantage, and balanced and comparable reporting.

The report of business feedback is one input into the draft Natural Capital Protocol Principles and Framework, which the Coalition also released last week. The Framework sets out four stages and 10 steps that a business should follow when carrying out a natural capital assessment. The report also provides sector-specific insight that will be included in the Food & Beverage and Apparel Sector Guides being released in 2016.

"By releasing this groundbreaking report on business expectation and the draft Framework today, we are starting our broader engagement process on the development of the Protocol,” said Mark Gough, Executive Director of the Natural Capital Coalition. “By working collaboratively, the Coalition is creating solutions, building consensus and creating momentum behind an approach that can change how we engage with the natural environment."

The Natural Capital Coalition is supported by 150 companies in its Business Engagement Program, many of which are being proactive in their valuation of natural capital. Among them, Kering recently made its Environmental Profit and Loss methodology public to encourage wider adoption of natural capital accounting; and Dow Chemical recently asserted that it expects to generate $1billion in cost savings and new cash flow by 2025 by valuing natural capital.

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