New biodiversity guidance to accompany the Natural Capital Protocol.

26th October 2020



The Capitals Coalition and the Cambridge Conservation Initiative recently published new guidance, aiming to enable businesses and financial institutions to better value biodiversity in their decision-making processes. The guidance is the latest in a growing suite of complementary guides for the Natural Capital Protocol.

What is the Natural Capital Protcol?

The Natural Capital Protocol (NCP) is a decision-making framework that allows organisations to identify, measure and value their direct, and indirect, impacts and dependencies on natural capital. 

In addition to the main framework, a number of companion sector guides and supplements have been published to complement decision-making processes. Sector guides include Forest Products, Apparel, and Food & Drink, whilst Biodiversity is the most recent supplement, published in September 2020. Unlike the Protocol’s sector guides, the supplements are not intended to be sector specific, rather they focus on particular areas of relevance that cross multiple sectors.

Why focus on biodiversity?

Biodiversity is a term used to describe all the variety of life. The NCP supplement for biodiversity is sadly a very timely publication. A series of reports have indicated the scale of crisis biodiversity is currently facing. A 2019 UN Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES) report found around one million plant and animal species to be facing extinction. Last month a report from the UN’s Convention on Biological Diversity confirmed that not a single Aichi target was fully met over the last 10 years. A State of Nature report has also outlined worrying trends faced by biodiversity in Scotland, including a 49% decline in the studied species. 

In tandem with a growing sense of the scale of crisis faced by biodiversity, is an increased recognition of its interconnection with the climate crisis. Protecting and enhancing biodiversity can build resilience against climate change, and fundamentally underpins human societies and global economy, supporting communities and livelihoods. Biodiversity loss as a driver of emerging infectious disease, has also been tragically emphasised by the current Covid 19 pandemic.

Biodiversity and natural capital 

Figure 1.1 
Relationship between biodiversity and natural capital stocks, flows, and values (adapted from figure 1.1 of the Natural Capital Protocol 2016)

Biodiversity is the living component of the planet’s natural capital assets, from which human societies receive a range of benefits, often called ‘ecosystem services’. Ecosystem services can be further classified as ‘provisioning’, ‘regulating’, ‘supporting’ and ‘cultural’. To take one example, ‘provisioning services’, describes ecosystem goods such as timber, or crops grown from arable farming. Natural capital is the underlying asset that provides these (free) goods and services, often traditionally taken for granted in decision-making processes. 

Viewing biodiversity through the lens of natural capital makes more visible to businesses and organisations previously unseen impacts and dependencies on biodiversity throughout their supply chains. This in turn should provide a clearer business case to protect and enhance the natural world. However, it should be acknowledged that integrating biodiversity into Natural Capital Assessments and decision-making processes can can be complex. Issues such as climate change, water use, sustainable development, and biodiversity overlap, which demands a joined-up approach to environmental management. The new biodiversity supplement seeks to ensure biodiversity is properly considered, within a larger and integrated natural capital framework. 

What is the new Biodiversity supplement?

The new guide is intended to closely mirror the Natural Capital Protocol, providing a step-by-step approach to better integrate biodiversity into natural capital assessments. It is organised across 4 stages... ‘Why’ (Framing Guidance), ‘What’ (Scoping Guidance), ‘How’ (Measure and Value Guidance) and ‘What next’ (Application Guidance). This stepped approach guides businesses through the process of identifying, measuring and valuing biodiversity in natural capital assessments, and how to make this information tangible in decision-making processes.

The supplement is intended to be applicable to a range of audiences, whether different business sectors, civil society, government, multi-stakeholder organisations, or academia. The supplement is also intended to be appropriate at multiple organisational levels, and in different geographies, whether terrestrial, freshwater, and marine systems. 

An overarching Biodiversity Guidance Navigation Tool is also available, which can guide businesses through a series of questions, including the 'Frame', 'Scope', 'Measure' and 'Value and Apply' stages of the NCP, to ensure biodiversity is more fully integrated in natural capital assessments. 

Closing thoughts…

Biodiversity has for some time been one of the more problematic areas to measure and value as it relates to natural capital, and indeed is often wholly missing from many natural capital accounts. So the NCP biodiversity supplement is unquestionably a hugely welcome attempt to redress this situation. The guidance has produced a comprehensive set of methods, frameworks, and tools to help the anchor biodiversity within natural capital assessments, and provides some useful case studies as starting points. 

It should also be commended from not shying away from some of the potential complexities of measuring and valuing biodiversity. This stems not least from the complexity of biodiversity itself, (composed of different components, e.g., species, habitats, ecosystems, genes), which can vary enormously the types of impacts and dependencies businesses will encounter. The supplement reflects this, providing 18 different examples of biodiversity-specific resources, relating to measurement and valuation. As such, it is highly flexible, and seems likely to produce a wide range of case studies depending on the objective and scope of the particular business or organisation utilising it. These different approaches should increase our overall understanding, and we hope, place biodiversity more centrally within decision-making processes in the future.

For more information about about the Naural Capital Protocol, follow this link.