Steve Bass is a co-founder of the Green Economy Coalition and a Senior Associate at the International Institute for Environment and Development.
Taking nature’s capital upstream
I’ve worked in sustainable development for 35 years, and believe that we are finally at a pivotal point. First, natural capital and its multiple values are being more routinely recognised and accounted for. Second, countries have a template of actions for achieving sustainable development, through the UN Sustainable Development Goals (SDGs). But there are barriers to both innovations: natural capital is not yet internalised in ‘upstream’ or mainstream decisions; and governments can become paralysed when they try to contemplate 17 Goals and their 230 indicators. I believe the two innovations can help each other: the SDGs offer a unique chance to take Natural Capital ‘upstream’; and a capitals approach can help to determine priority strategies from among the SDGs.
Three ‘lenses’ on natural capital
Let’s start with multiple perspectives on Natural Capital. From my experience of working with communities, policy makers and businesses – especially through a series of national dialogues convened by the Green Economy Coalition, there are three main ‘lenses’ through which organisations tend to view natural capital:
1. Functional – natural capital produces flows of many benefits that underpin the economy and therefore have financial value. Many businesses and national governments view natural capital this way.
2. Cultural – ‘nature’ or ‘the environment’ provides diverse aesthetic and spiritual values that are essential for society. Much of civil society feels this way.
3. Existential – we cannot live without nature, which is fundamental for all life and every person and which itself has existential limits. Environmental NGOs and religious groups feel this way.
Yet no individual, and few organisations, adhere to just one perspective. A Minister of Finance, for example, will emphasise the functional/financial values – the jobs and revenues – that Natural Capital produces. But they might also be a gardener, a landscape painter, or a grandparent, and so be motivated by cultural and existential values. The three basic perspectives must therefore be seen together. Indeed, they map neatly to the economic, social and environmental strands of sustainable development, and to the three words ‘Inclusive Green Growth’.
Accounting for diversity
Clearly, then, people won’t fully embrace tools and instruments that privilege just one perspective, even if they are formally mandated. This could be a barrier for Natural Capital Accounting (NCA) if it were to emphasise short-term functional and financial values, and therefore flows. Yet there is nothing to stop NCA offering more diverse information on the stocks of Natural Capital that also matter for cultural and existential reasons.
The first global NCA Policy Forum was held in The Hague in November 2016. NCA has been firmly part of the Dutch machinery of government for over fifty years. Bringing together twelve countries to review NCA’s uptake and use, the Forum showed that when NCA approaches are designed principally by data producers they prove less powerful than when they come about to meet the demands of multi-stakeholder, multi-variate decision-making – using the (three) lenses that matter to people.
Capitals can make sense of the SDGs
But Natural Capital approaches need political traction. Thanks in part to events such as the World Forum on Natural Capital, businesses are engaging. Natural Capital is also informing environment policy, such as National Biodiversity and Strategy Action Plans. But to influence mainstream government processes, Natural Capital needs to go ‘upstream’, to be globally visible, yet locally relevant. There is strong potential for this through the Sustainable Development Goals (SDGs)
The SDGs have been hard-won, but countries can become paralysed by their complexity. The danger is that governments pull ‘indivisible’ SDGs apart and put each under different government departments. They then produce a shopping list of ‘Means of Implementation’ for each SDG, which invariably includes a dream budget, perhaps aimed at an external funder in the case of developing countries.
Yet the core means of implementation won’t turn out to be extra funds spent by anomalous institutions. They will, instead, be what is already available to countries or companies: i.e. their natural, human, social, physical and financial capitals. To think of sustainable development as the process of managing the portfolio of capitals – to produce real wealth that enables wellbeing for all – is to have a more deeply rooted, realistic picture of the country’s or business’ potentials. To manage the portfolio well, we need better information on the economic, social and environmental capabilities and limits of each of these capitals.
A capitals approach ought to appeal to the economists who tend to dominate national economic decision-making, but it should not be hostage to a narrow economic view.
Time to convene?
With governments now busy considering how to ’implement’ the SDGs, now is the time to help decision-makers match the SDGs to their capitals portfolios and the diverse values they represent. The World Forum on Natural Capital in November offers a moment to evolve the discussions. Putting the ‘three lenses’ on the same table makes for a good starting point.
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