Underpinning natural capital assets and potential drivers of environmental change

Underpinning natural capital assets and potential drivers of environmental change

After linking economic sectors to the ecosystem services they depend on, it is important to understand how these services are provided by natural capital assets and how they might be influenced by drivers of environmental change such as pollution and climate change. Identifying the natural capital assets underpinning each ecosystem service and the potential drivers of environmental change that could impact them in a way that materially affects business performance enables financial institutions to understand what is important for service provision and what could lead to risk of disruption.

Factsheets were produced for each ecosystem service outlining the following information: a description of the ecosystem service-natural capital asset system, identification of the main drivers of environmental change influencing or impacting the system and the mechanism by which these impact ecosystem service provision. Web of Science, Google and key document searches, for example TEEB for Business, with standardised search terms were used to compile factsheets for all ecosystem services according to a pre-defined template.

Summary tables in each factsheet provide a quick overview of the natural capital assets most important to service provision and the drivers of environmental change that are likely to influence them. Importance here is defined as the sensitivity of the ecosystem service to a change in the state of the natural capital asset, and degree of dependence of the ecosystem service on the natural capital asset. Influence is defined as the degree to which the natural capital asset is susceptible to the driver of change, and the degree of variability and uncertainty in the response of the natural capital asset to the driver of change.

A framework was developed with Red-Amber-Green criteria to assess the importance of natural capital assets to ecosystem services, the influence of drivers of environmental change on natural capital assets and to provide contextual information on the drivers of environmental change. This framework was developed in collaboration with the Natural Capital Finance Alliance team, and reviewed internally and externally by key players in the natural capital and scientific community. Each assessment is accompanied by a justification for the Red-Amber-Green rating.

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