The report – ‘Investing in our natural assets: how government can support business action‘ – from environmental coalition The Aldersgate Group, suggests that the UK’s should increase its natural capital in order to support the future resilience and productivity of its economy.

Nick Molho, executive director of The Aldersgate Group, said: “Not properly valuing natural capital poses economic risks for the UK but natural capital projects can also provide excellent investment opportunities, by ensuring that the key natural resources our economy and society depend on will remain available in the long term.

“By putting more focus on improving the state of our natural capital in policy making and investment decisions, government and businesses can manage risks more effectively and will reap the benefits in terms of long-term growth and competitiveness.”

Nurturing Nature

Natural Capital refers to resources that provide goods and services essential to a functional society and economy, such as water, timber and food. In its report, the Aldersgat Group notes that environmental damage from these areas, directly affects costs for government, business, supply chains and households.

The report sets out how action by government can help deliver natural capital improvements. It recommends gaining a better understanding of our reliance on natural resources as a way to better estimate its importance and integrate policies which protect these assets. The Office of National Statistics, DEFRA and the Department for Health should all play big roles in the transition, it states. 

The report also highlights the degradation of soil – estimated to cost England and Wales £1.2bn annually – and coastal wetlands – which provides services in the region of £1.5bn annually by mitigating the impact of storms and floods – as two areas where natural capital has been severely underestimated.

The promotion of ‘green spaces’ such as the NHS Forest Initiative, which can improve health, accelerate patient recovery and cut costs for the NHS, was used as just one example of how natural assets can stimulate economic and social improvements.

Other case studies from Crossrail, National Grid, Kingfisher and the Woodland Trust all explore how businesses are assessing their relationship with natural capital and taking the necessary steps to protect it.

Money trees

Finally, the report also calls for long-term investments in natural capital improvements and new market opportunities to be supported by government; using institutions such as the Natural Capital Committee to safeguard a natural capital strategy.

Environment secretary Liz Truss has already played up the importance of natural capital, estimating that forests, soil and rivers alone are worth £1.6tn. Infrastructure services firm Aecom, recently conducted analysis suggesting that UK businesses and landowners could be missing out on a £7bn windfall by ignoring the natural capital potential of their land.

The need for investment is seemingly bringing change, after 40 of the world’s biggest businesses, including Kering, Nestle and Coca-Cola, were given access to a draft Protocol which enables them to effectively gauge environmental impacts and develop natural capital business models.

Matt Mace

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