Abstract
Natural capital assets are currently under pressure globally. This pressure may result in changes in the function of ecological systems and associated ecosystem services, resulting in changes in the benefits derived by people. The loss of natural capital also translates into economic and business risk. While advances have been made to understand and classify ecosystem services, the linkages between such services and the natural capital assets that combine to enable service provision are less well established. An agreed classification of natural capital assets is required to standardise their identification, description and measurement, and support action to reduce and mitigate the pressures they are under. Here, we evaluate the main systems classifying the environment into natural capital assets, against a number of requirements for decision making, showing that to date, we lack a unified classification encompassing all aspects of the natural environment. We have thus amended and consolidated existing classifications and propose a new hierarchical classification, which allows standardisation of use within public and private sector natural capital assessments. Promoting a common understanding is key in measuring and monitoring the value of assets and will enable more consistent and holistic decision making in relation to the management of natural capital.
Highlights
Natural capital is the “stock of renewable and non-renewable resources that combine to yield a flow of benefits to people” (Natural Capital Coalition, 2016)
Natural capital assets are currently under pressure globally. This pressure may result in changes in the function of ecological systems and associated ecosystem services, resulting in changes in the benefits derived by people
Standardisation is challenging as the way in which natural capital assets combine to support services and benefits is complex, and the data available for reporting on assets is often incomplete and may only provide a partial picture of overall status and trends
Summary
Natural capital is the “stock of renewable and non-renewable resources that combine to yield a flow of benefits to people” (Natural Capital Coalition, 2016) As such, it can be helpful in drawing connections between the natural world, sustainable development and human wellbeing and/or livelihoods (Guerry et al, 2015). Numerous factors are leading to the depletion of natural capital assets, including unsustainable use of resources by humans, pollution, land use change, and habitat fragmentation If these assets decline below a threshold, the natural function of ecological systems and the associated ecosystem service flows will change to a less favourable or non-functional state (Mace et al, 2015). Existing formal classifications group natural capital assets in varying ways (for example SEEA Central Framework (2014a–c); Natural Capital Committee (2014), Shepherd et al (2016) and OECD Green Growth Indicators (2017)) Their utility in public and private sector decision making is yet to be explicitly evaluated. Company risk assessments and siting decisions will be very different in wetlands compared to deserts so any classification of natural capital assets would need to breakdown habitats into this level of detail to ensure suitability for decision making
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