The Natural Capital Protocol is a decision making framework that enables organizations to identify, measure and value their direct and indirect impacts and dependencies on natural capital.
All organizations, to varying degrees, are dependent on the health of the natural world, and often these organizations likewise impact on nature’s ability to underpin their success. Understanding the complex and dynamic relationships that organizations have with the health of natural assets and the ecosystem services they provide enables organizations to make more informed decisions with benefits for their businesses as well as communities, society, the broader economy and the natural world.
Decision makers often do not have the luxury of being able to take actions based purely on their beliefs, opinions or gut feelings. Decisions in organizational contexts must be made on the basis of information. A natural capital approach broadens the quantity and quality of information available to decision makers.
Without an understanding of their impacts and dependencies on natural capital, many decision makers will be at least partly ‘flying blind’, and can consequently make decisions that are inefficient, ineffective or counterproductive.
Until now, natural capital has for the most part been excluded from decisions and when included, it has been inconsistent, open to interpretation, limited to moral arguments, or based on an incomplete understanding of organizational relationships to natural capital.
The Protocol responds to this gap by offering an internationally standardized framework for the identification, measurement, and valuation of impacts and dependencies on natural capital in order to inform organizational decisions.
The Protocol Framework (figure 0.1) covers four stages, “Why”, “What”, “How” and “What Next”. These Stages are further broken down into nine Steps, which contain specific questions to be answered when integrating natural capital into organizational processes. Although set out in a linear way, the Protocol is iterative and allows users to adjust and adapt their approach as they progress through the framework.
When applying the Protocol, use our templates to help you to structure your outputs for each Step.
The Protocol is applicable within any business sector, to organizations of all sizes and in all operational geographies. The Protocol is also applicable at multiple organizational levels and scopes, for example at a product, project or organizational level.
The Protocol allows you to measure, value and integrate natural capital impacts and dependencies into existing business processes such as risk mitigation, sourcing, supply chain management and product design.
The Protocol is not prescriptive and all available natural capital tools and methodologies are compatible with an application of the Natural Capital Protocol, for instance, those found on the Natural Capital Protocol Toolkit.
While there are leading national level accounting frameworks such as the UN System of Environmental Economic Accounting (UNSEEA) implemented by governments, for example through the World Bank led Wealth Accounting and Valuation of Ecosystem Services (WAVES) global partnership, the Natural Capital Protocol is focused at a business decision-making level and helps organizations to understand the value of their dependence on ecosystem flows, rather than the value of natural capital stocks. For more information on the difference between natural capital stocks and ecosystem flows read our FAQ.