2nd March 2022 By Rory McLeod
The Scottish Forum on Natural Capital was formed in late 2013, as an outcome from the first of three World Forum on Natural Capital conferences held in Edinburgh. At its inception, a key part of the Scottish Forum vision was to increase awareness across society about natural capital. This increased awareness was not considered an end in itself, rather that it should result in increased actions to protect and enhance our stocks of natural capital.
Over eight years later, the Scottish Forum has come a long way, and so has awareness of natural capital as both a concept and approach. The natural capital concept has indeed gained in traction across society, moving beyond policy circles and academia, to a place where the term is increasingly referenced in mainstream media. However, whilst progress has undoubtedly been made, an important job remains to continue to raise awareness about the concept, about the utility of natural capital approaches and also to advocate for their centrality in decision-making processes.
What is “natural capital”?
Natural Capital can be defined as "the renewable and non-renewable stocks of natural assets, including geology, soil, air, water and all living things, that combine to yield a flow of benefits to people". The concept makes us see our natural environment as an asset, which provides a wide range of benefits (often called ecosystem services) for our society and economy. Just like any kind of asset, natural capital assets are a store of value, which can of course depreciate as well as appreciate. This underlines our need to invest in, and manage, our natural capital so that the flow of benefits will continue into the future. This also adds an important ethical component to the concept, with a duty to pass on a healthy natural capital asset to future generations.
“Natural Capital approaches” unsurprisingly, flow from this initial concept, although there can be more variance in what they entail. Fundamental to a natural capital approach is the idea, that our economy and society are embedded within nature, rather than an externality or afterthought. This was a key message from the Dasgupta report, published by the UK Treasury in 2021, that concluded “our economies, livelihoods and well-being all depend on our most precious asset: Nature”. A natural capital approach therefore recognises this crucial dependency, and appropriately values the importance of our natural capital assets in decision-making processes.
Often adopting natural capital approaches require natural capital assessments and accounts. These can significantly increase the amount of information and data available to decision-makers, and make more visible the value nature provides to us, whether in qualitative, quantitative or monetary terms. Frameworks such as the Natural Capital Protocol can highlight impacts and dependencies from quite far down an organisation’s value chains, that were not previously widely considered. Natural Capital accounts meanwhile, whilst still developing in methodological terms, provide data on the different types of value that nature provides to economy and society. Both the UK and Scottish Governments produce annual Natural Capital Accounts based on ONS data, which include monetary values, whilst NatureScot also produces a non-monetary Natural Capital Asset Index.
Finally, a natural capital approach can also entail a systems-based approach, serving as a useful cross-cutting way to join up different sectors or issues (such as land, marine, the supply chains of manufacturers etc.). Increasingly this is also coming to mean natural capital considered as part of an integrated “capitals approach”, alongside social, human and economic capital. Capitals Coalition are prominent among those working in this area, to develop, advocate for, and advance a capitals approach.
What does the Scottish Forum do?
If the core function of the Scottish Forum could be summarised by a single word it would be “connectivity”. We seek to bring together a broad network of organisations and their leaders, from across the public, private and voluntary sectors, with the aim to bring natural capital into mainstream decision-making.
The Scottish Forum currently has around 130 members, with a broad range of representation, from land managers to finance, and from government agencies to academia and research. Our secretariat is provided by the Scottish Wildlife Trust, and our steering group contains senior leaders from across Scotland.
Whilst the steering group is a key coordinating focus for the Scottish Forum, in terms of many day-to-day operations, much of our work is centred through our working groups. These include Ecosystem Services Community Scotland (ESCom), which exists at the interface of policy, practice and research, the Sustainable Land Management group which plays an important role in joining up a vital policy area, whilst our Nature Finance Pioneers group has given the nature finance community in Scotland (also in the UK and beyond) an online home to increase discussion and connectivity.
We have recently set up a fourth working group, the Marine Natural Capital Forum, which will bring together a range of stakeholders, with the intention of bridging the gap between technical expertise and policy makers, and identifying opportunities for collaboration.
More information can be found about all of our working groups here.
Some current focus and projects
Our current Scottish Forum Chair, David Watt, is the first to have a specifically business background, and so we have been keen to look for new opportunities to engage with the private sector during David’s time in post.
Towards the end of 2021, we launched the “100 Business Actions for Nature” project, which created a free-to-use website as a resource to help businesses build nature and climate into decision-making processes. We hope that businesses will use this website to find suitable suggestions, implement actions, spark conversations, and to share ideas. Whilst this resource is intended for businesses of all sizes, there is a particular focus on helping SMEs to engage with the natural capital agenda, and to play their part in meeting the climate and nature emergencies.
A second way the Scottish Forum is currently seeking to engage with the private sector is through nature finance. This fast-developing policy area seeks to bring together environmentalists with financial experts, and other interested stakeholders. Building on the Route Map to £1 Billion published by The Scottish Wildlife Trust and SEPA in 2020, the Scottish Forum created a nature finance working group on Basecamp, with the aim to collaborate on models and routes that can facilitate greater private sector investment in nature. The necessity for this undertaking was illustrated by a Green Finance Institute report from 2021, which estimated that to meet nature-related outcomes in the next ten years, we will require between £44 billion to £97 billion additional investment in the UK, above current public sector commitments.
It was through this working group that the Scottish Forum formed a partnership with Global Ethical Finance in a series of events over two days during CoP26. Entitled 'Finance for Nature in Nature', the wider partnership included the Scottish Government, UNDP, Global Canopy and Nature Conservancy. We facilitated a series of “hackathons”, exploring different routes and models that can help us to plug the funding gap we know exists, and secure the investment we need in nature. Videos capturing the entirety of the two days can be found below.
Finally, there is currently great interest among our 180 working group members on the issue of community land, and how it intersects with nature finance. We are planning an event later this year, that will take a comparative look at different financial models that seek to share benefits from ecosystem services more equitably among communities. This event will be free to attend for anyone who wishes to join our Nature Finance Pioneer’s group. (details below)
How you can get involved
About the author
Rory McLeod is Project Officer with the Scottish Forum on Natural Capital.
This article first appeared as a Countryside Jobs Service article in February 2022.