The House of Commons has yesterday urged the government to embed the value of natural capital in the national accounts and policy making processes as early as possible, and to adopt the recommendations of the Natural Capital Committee’s (NCC) first annual report.
The House of Commons was debating on the first State of Natural Capital report issued by NCC, an independent committee reporting to the Economic Affairs Committee (chaired by the Chancellor of the Exchequer), which sets 15 recommendations aimed at building a framework to better measure and account for changes in natural capital assets.
Natural capital refers to the elements of nature which either directly provide benefits or underpin human wellbeing.
The debate was secured by conservative back bencher Graham Stuart MP. "The NCC report calls on the government to work with leading companies, accounting bodies, landowners and managers to develop and test guidance on best practice in corporate natural capital accounting," Stuart said before quoting Unilever chief financial officer Jean-Marc Huët.
According to Huët, the current financial reporting model only tells half the story about a business’s true performance and potential. For Huët, numbers are saying "little of its reliance and impact on natural capital, factors that will increasingly influence competitiveness in a resource scarce world."
Back benchers expressed their frustration at a government that had stated the ambition of being the first generation to leave the natural environment in a better state than it inherited it.
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The World Forum on Natural Capital programme director, and council member of the International Union for Conservation of Nature Jonathan Hughes said: "While it is a welcome development that the House of Commons is debating natural capital, it is a great shame that this is not part of the coalition government’s policy agenda.
"I do not want to diminish backbench enthusiasm for the topic but given the prime minister’s stated commitment to tackle environmental issues it is time that natural capital reporting became a major part of the toolkit to tackle climate change," he said.
MPs agreed that promoting the concept of natural capital carries also the risk to commoditise nature, which could lead to the opposite outcomes to those sought by the NCC report: nature’s destruction.
But there was consensus that incorporating the value of natural capital in the national accounts as well as businesses accounts with strong safeguard and planning systems, would not only be beneficial for the protection of nature but also for the economy.
In that sense, the UK National Ecosystem Assessment (UK NEA), a research initiative of the Parliament’s Environmental Audit Committee, calculated in 2011 that if the UK’s ecosystems were properly protected, they could add an extra £30bn ($48bn) to the UK economy.
In contrast, neglecting and losing ecosystem services may cost as much as £20bn to the economy per year, according to the UK NEA.