Natural capital refers to natural resources and ecosystems that provide valuable goods and services to humanity. Investing in natural capital is important because ecosystems provide trillions of dollars in economic value but are being degraded. The overexploitation of natural resources has resulted in a biodiversity crisis that costs the global economy more than banking crises. To invest in natural capital, companies should assess their impacts on ecosystems, put a price on nature's value, optimize resource use, invest in conservation, and engage suppliers to bring solutions to scale. There are various ways to estimate the economic value of ecosystem services, including carbon taxes, direct market valuation using market prices or avoided costs, to incorporate nature's value into business decisions and manage risks.

1. Why Invest in Natural Capital?
Group 4
Paul Marra
Marc Mikhael
Riette Visser

2. What is natural capital?
• Land, air, water, living organisms and all
formations of the Earth's biosphere that
provide us with ecosystem goods and
services
• Stock of natural ecosystems
• It is the extension of the economic notion of
capital (manufactured means of production)
to goods and services relating to the natural
environment
• Structure and diversity of the system are
important because the flow of services from
ecosystems requires that they function as a
whole
• Natural capital may also provide services like
recycling wastes or water catchment and
erosion control
• Examples

3. Why Invest in Natural Capital?
• Nature provides trillions of dollars worth of inputs vital
to long-term business success
• Ecosystems are critical to business success, but we are
allowing them to collapse
• The over-exploitation of natural resources, uncontrolled
land use change and a general underestimation of the
socio-economic value of the environment sector have
resulted in a biodiversity crisis
• The global economy is losing more money from the
disappearance of forests than through the current
banking crisis. An EU-commissioned study puts the
annual cost of forest loss at between $2 trillion and $5
trillion
• Companies need to start investing in eco-markets; “if
they want to stay in the black, they’ll have to get in the
green.”
• Business Benefits: Reduce risks; Cut costs; Enhance
brand; Growth

4. • Incorporate natures value into the cost of conducting
business. A matter of managing risk and managing our
supply chains, putting a value of the cost to nature.
• Must have buy in of the company. Initiative to mobilize
a critical mass of major companies to initiate projects
and investments (“commitments”) that effectively
demonstrate the need for business to protect and
restore green infrastructure around the world including
forests, fresh water and marine systems
How to Invest in Natural Capital

5. • There are numerous approaches to estimating the
value of an ‘eco-system service’.
• Carbon Tax (Government dictated based advisory
panels) – involves putting a price on the carbon
footprint associated with the creation and subsequent
selling. Paid throughout the supply chain cycle.
• Direct Market Valuation includes:
- Market Price
- Cost based Approaches
- Avoided costs
Valuating Natural Capital Methods?

6. 1. Assess your company’s impacts and dependencies on
ecosystems
2. Put a price on nature’s value
3. Optimize resource use to minimize environmental
degradation
4. Invest strategically in conservation and restoration
5. Engage your value chain to bring solutions to scale
6. Innovate in materials, processes and products
7. Build natural instead of manmade infrastructure
8. Leverage new natural capital markets and investment
tools
9. Join forces
Framework for Action!