Cambridge Institute for Sustainability Leadership (CISL)
Biodiversity and ecosystem services in corporate natural capital accounting: Synthesis report
26 October 2016 – A new report, which is the result of a unique collaboration between business and academia, highlights the challenges and opportunities for businesses in factoring biodiversity into their decision-making.
It is the result of a unique partnership between business and academic researchers convened by CISL’s Natural Capital Leaders Platform. The Platform is a global network that has worked with over 100 companies wishing to understand and manage their impacts and dependencies on natural resources and ecosystems. The work is informed by experts from conservation, academia and industry who came together for a two day workshop in June 2016 to explore how improved biodiversity metrics and methodologies can be developed, tested and then deployed for use in investment and corporate sectors.
Biodiversity represents the variety of all life on Earth. It is vital to the functioning of our ecosystems and provides a wealth of benefits such as regulating water flows, increasing soil fertility and providing pollination.
Businesses are increasingly aware of their dependencies upon nature’s goods, however this has focused mainly on water usage and carbon emissions, often neglecting the other critical aspects of natural capital such as ecosystems and biodiversity.
Environmental profit & loss (EP&L) methodology
Kering has pioneered the development of corporate natural capital accounting through its environmental profit & loss (EP&L) methodology. This has proved to be an effective and powerful tool to help the company understand the environmental impacts of its business and supply chains. Kering is now improving the EP&L representation of biodiversity and ecosystem services and reviewing the underlying data used to predict ecosystem impacts.
This report outlines the way that the current EP&L methodology measures impacts on ecosystems and biodiversity and suggests how this could be improved. This includes using ‘real-time’ data from predictive models and adopting a separate indicator that accounts more directly for the impacts on biodiversity. This metric recognises that biodiversity cannot be completely ‘valued’ as a utility for people and that there is a value of biodiversity beyond that which can be satisfactorily incorporated into ecosystem service models.
The report identifies that the EP&L methodology can be improved to incorporate more dynamic, real-time and accurate analysis of ecosystem services. This can be complemented by a biodiversity metric to capture less tangible benefits to create a methodology that is simple, pragmatic and grounded in delivering to business goals.
Working paper
The business report is complemented by an academic working paper which provides further details on the methodology.
Citing this report
Please refer to this report as University of Cambridge Institute for Sustainability Leadership (CISL). (2016, October). Biodiversity and ecosystem services in corporate natural capital accounting: Synthesis report. Cambridge, UK: Cambridge Institute for Sustainability Leadership.
Businesses are increasingly including natural capital in decision-making. Collaborate with like-minded companies by joining the Natural Capital Leaders Platform.
