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TheNaturalCapitalProtocol:ANewComprehensiveFrameworkforManaging
NaturalCapital
Michelle LapinskiNatural Capital Coalition
@m_ellelapinski
@NatCapCoalition #NatCapProtocol
Michelle Lapinski@m_ellelapinski@EarthGenome
The Natural Capital Protocol: A Comprehensive New Framework for
Managing Natural Capital
New Metrics BostonNovember 15, 2016
vDecision we wanted to influence: vCorporate and country and local partner investment
vBusiness application:vValue of shorelines to business and local economies
vEstimate total value and/or net impact
vImpacts and dependencies:vClimate change
vNatural Capital (land, water, soil, runoff)vBiodiversityvDevelopment
vInfrastructure: stormwater runoff & shoreline management
vDecision we wanted to influence: vUse of internal carbon price for screening capex decisions
vBusiness application:vEstimate natural and social capital for Tata companies vApplied across core extractive businesses: steel, ore
vResultvUsed to engage Board, C-suite and key non-sustainability influencers
vDecision we wanted to influence: vEnhance the business model for Indian sugar production
vBusiness application:vCompare optionsvAssess impacts on stakeholdersvEstimate total value and/or net impact
vResultvFarmer productivity h28%vWater use i28 billion litres
vDecision we wanted to influence: vProduct & process innovation vSupply chain (sourcing, location and logistics)
vBusiness application:vCompare optionsvAssess impacts on stakeholdersvEstimate total value and net impactvCommunicate internally and externally
vBusiness boundaries:vWhole value chain considered (supply chain, manufacturing, distribution, use, end of life)vCorporate vProduct
vResultv2013 EP&L: R$ 132m vConsumer use phase: R$ 455m
The Natural Capital Protocol is a
standardized framework for business
to identify, measure and value its direct
and indirect impacts and dependencies
on natural capital
Introducing the Protocol
The Protocol is a framework designed to help business generate trusted, credible, and actionable information for
business managers to inform decisions
For business to make better decisions
What are the natural capital risks and
opportunities in your business?
• Operational• Legal and regulatory• Financing• Reputational and marketing• Societal
vEfficiency is Insufficient
vNatural capital assets are typically business critical – but not on the balance sheet
vSilo’d approaches have unintended consequences
vNeed to demonstrate value in $’s and business metrics.
Why Natural Capital?
8 Adoption Factors
- Accessible- Flexible- Aligned
- Credibility- Relevance
- Comparable- Decision-useful- Unlocks value
6 Primary Uses
- Strategic planning and decision making
- Supply chain risk-assessment
- Capital allocation
- Investment decision making
- Operational decision making
- External reporting
4 Benefits
- Improved risk management
- Better decision making
- Increased competitive advantage
- Balanced and comparable reporting
Establish a clear framework that is…
...that conveys…
...and drives meaningful results…
80+ businesses from 15 sectors and all geographic regions
We asked business what they needed
Developed the Protocol Developed the sector guides, and managed the business
engagement and pilot testing
A unique collaborative process
The Coalition is hosted by ICAEW.
Over 50 businesses contributed to the Protocol piloting program
Deep Dives
Piloted the entire
Protocol
Piloting companies
Piloted different
steps of the Protocol
Leading companies tested the draft Protocol
Get started: Conceptual model
Get started: Conceptual model
Get started: Conceptual model
The Natural Capital Protocol Framework
Example materiality matrix from the food and beverage sector guide
PotentialWetlands
GIST– GreenInfrastructureSupportTool
SustainabilityPerformance
RiskManagementProductivity
OperationalizingNaturalCapitalAttheStrategy,ProgramandProjectLevel
CreatingaCompellingBusinessCase IntegratingintoStrategyandPrograms
Coca-Cola Sustainability Programs
Business Value
Ecosystem Services
Coca-ColaValueChain
1
2
3
4
Impacts & Dependencies
ProgramUpgrades and
Extensions
Business ValueOf Program Upgrades
Risks & Opportunities
21
Can nature deliver $1B in NPV? We think so!
www.naturalcapitalcoalition.org
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