Companies, society and individuals all depend on ecosystems for vital services. Human activities are having a significant impact on ecosystems.
Companies, society and individuals all depend on ecosystems for vital services.
Business and government leaders from around the world are increasingly sounding the alarm about the significant impact of human activities on the natural environment – affecting its capacity to provide the goods and services we rely upon, and consequently resulting in a clear cost to business.
Such is the concern of business and government that the recent Rio+20 UN conference on sustainable development saw CEOs of financial institutions, including banks, investment funds, and insurance companies, make a formal commitment to work towards integrating natural capital considerations into their products and services.
Shareholders are also becoming more engaged with the issue, while governments are exploring regulatory or policy changes to encourage the sustainable use of biodiversity and ecosystem services (BES) through the development of frameworks for national ecosystem services accounting. In addition, the business and NGO communities are helping to harmonise approaches through a number of global initiatives such as the Natural Capital Coalition and the Natural Capital Declaration.
The commitment at Rio+20 demonstrates the growing realisation that all economic activity is either directly or indirectly linked to natural capital, and action is needed. Nonetheless, this link has yet to be measured and addressed widely by the corporate sector. As all aspects of business are ultimately linked to and influenced by trends in natural capital, this highlights a risk to business, which could ultimately lead to business failure.
The question remains: how do we effectively measure, assess and report to business on the economic impacts of natural capital on business?
KPMG member firms have been active in helping their clients answer the above question. Clients use KPMG services to:
5 Key questions