The challenging path towards embracing natural capital

15 Jul The challenging path towards embracing natural capital

Earlier this week, the UK government announced its formal response to the Dasgupta Review. The independent review published in February focused on tackling issues concerning biodiversity and the necessary changes needed to eliminate and reverse the damage to global ecosystems as a consequence of economic activity. According to the independent review on the economics of biodiversity, nature is seen as a blind spot in the world of economics. Professor Sir Partha Dasgupta from the University of Cambridge explains that we can no longer afford for nature to be absent from accounting systems that control our finances or continue to be ignored by economic decision-makers.
This is according to an independent review on the economics of biodiversity, produced by Professor Sir Partha Dasgupta from the University of Cambridge.

The review provides a detailed economic framework that includes how we are dependent on nature, with a dominant focus on ecology. Emily McKenzie, the head of evidence and policy on the Dasgupta Review, explains that nature needs to be considered as an asset and appreciate how we are dependent on it. This involves recognising that we are all asset managers in our various positions. McKenzie also states that at present, we’re mismanaging our assets on a global scale, in particular our natural capital, which we tend to measure as our ecosystems.

In response to the review, the Government agreed with its conclusions that nature and the related biodiversity is vitally important to our economies and wellbeing. Financial and economic decision making must consider all of this.

The government’s two main commitments in response to the review include delivering a nature-positive future by reversing biodiversity loss by 2030 and ensuring all economic and financial decisions support this target. The response includes a combination of several immediate measures and additional ways to integrate other plans into policy moving forward.

The Dasgupta explores recommendations based on three individual parts: ensuring demands on nature do not exceed supply, transforming the measures of economic access to shifting the economy towards a more sustainable focus and changing institutions and systems. Mckenzie explains that they are focused on finance and education systems to allow all of these necessary changes to continue for the future.

Paul Johnson, economist and director for the Institute for Fiscal Studies, explains that factors such as tax will play a role in managing the supply of natural capital but believes that biodiversity requires several measures to work. Tax represents only a minor element of how we can deal with biodiversity. We need to approach this in different parts and think carefully about how regulations e Dasgupta Review places a lot of emphasis on education. New goals and measures will be challenging to monitor and observe without engaging people in maintaining their actions and those businesses and governments. Education concerning the importance of biodiversity needs to begin in the earlier years and continue into professional development. McKenzie highlights that this is vital as it requires a cross-government approach. The Government Office of Science, the Economic Service and the Foreign Commonwealth and Development Office will need to promote nature and explore the curriculum and training within all of its work.

Natural capital also needs to be incorporated when defining trade agreements. While this may make negotiations more challenging, it’s a necessary step that enables a real difference for the future. The UK needs to take a leading role in supporting international collaboration and developing international institutions to measure global progress.

On a national level, the Government requires several significant policies covering a range of issues, from biodiversity farming, fishing practices, climate change and others. Accountants will plaapply to our environment.

Monitoring progress and controlling and reducing these impacts is relatively complex and requires careful consideration. There must be measurements, but it is equally important that these factors are taken seriously by all groups, politicians and everyone else.

Thy a bigger role in implementing changes across organisations. The Natural Capital Assessment needs to be incorporated more widely and play a part in the decision-making process.