Businesses remain unaware of natural capital impact, warns WWF
EXCLUSIVE: The majority of businesses are critically failing to address the impact of their operations on the world's depleting stock of natural resources, according to WWF-UK's director of advocacy.
Trevor Hutchings is therefore urging the private sector to sign up to the newly-formed Natural Capital Protocol, which allows businesses to value and account for natural capital as systematically as they do for financial capital.
“There are some very progressive businesses out there who are taking account of natural capital and ensuring that their business operations have less impact on natural capital both here and abroad,” Hutchings told edie. “However, the majority of businesses still don’t fully understand the impact of their business on natural capital, or indeed their dependency on natural capital.
“Where they are dependent on land, water or materials, they generally don’t understand that. What we would encourage businesses to do is sign up to the Protocol to make it easier to track their environmental impact.”
Hutchings has previously told edie that the treatment of natural resources such as water, forests, and metals as 'infinite' are guilty of “extreme short-termism”. According to WWF, global wildlife populations have halved over the past 40 years, while significant economic gains have been made through the explotiation of the natural environment. The role of business will therefore be critical to ensure that natural capital is preserved at more sustainable levels, Hutchings says.
His UK organisation works directly with companies through industry-specific platforms to help the private sector become better stewards of shared natural assets by encouraging improved production and responsible sourcing of raw materials. But Hutchings insists that businesses can’t promote natural capital growth solely on their own.
WWF advocates Government policies and regulation which assess the significant material risks from worsening environmental degradation. Hutchings is therefore calling upon the UK Treasury to adopt a natural capital “stress test” to analyse these impacts, and inform policy responses to support the future resilience and productivity of the economy.
“The Natural Capital Committee (NCC) - which is part of Government - has done some really progressive work on how natural capital should be taken into account in policymaking, and we want to see that Committee now take those ideas and help embed them across Whitehall," Hutchings said.
“We want natural capital to be at the centre of the government's promised 25 year environment plan, which in turn will guide Whitehall decision-making - whether that's on transport , housing or other policy."
“We have one specific ask of the Treasury: to go through a natural capital stress test. This means essentially understanding the UK’s dependence on natural capital and what the state of the UK’s natural capital is, and how it changes over time, and understanding the vulnerabilities the UK economy faces through natural capital depletion.
"It could be something that the Chancellor [Philip Hammond] could report on at every Budget. As well as talking about the state of the economy, in relative terms we could talk about the economy on a natural capital level.”
The financial benefits of taking natural capital into account are numerous: technical services firm AECOM recently stated that UK firms are missing out on a £7bn windfall by ignoring natural capital initiatives. In an exclusive blog for edie earlier this year, the principal consultant of AECOM said collaboration and sharing best practice is key to tackle the challenges associated with undertaking assessments of natural capital impacts and dependencies.
Meanwhile, a recent report from Aldersgate Group called on the UK Government to support businesses investing in natural capital, after former Environment Secretary Liz Truss’ assessment of natural capital, which estimated that forests, soil and rivers alone are worth £1.6tn.