Natural Capital Declaration
The Natural Capital Declaration is a commitment by financial institutions to work towards integrating natural capital criteria into financial products and services for the 21st century.
Just as ‘capital’ is defined as the stock of materials or information that exists within a system at any given time, ‘natural capital’ refers to the materials and services within ecosystems. Much as an investor will use financial capital to generate profits, natural capital yields a flow of valuable ecosystem goods and services. For example, a forest or a fish population will provide a future flow of timber, freshwater or food.
Natural capital issues have increasingly proven to be material for financial institutions across different types of products, including project finance, corporate finance and public equities. Most of the evidence is on an anecdotal basis, although there is growing focus on systemic issues related to natural capital risks.
The Declaration is a response to mounting evidence that failure by financial institutions to consider natural capital is leading to reputational, operational and credit risks for lenders, investors and insurers.
The Natural Capital Declaration was launched at the Rio +20 Earth Summit in June 2012. More than 40 financial institutions have signed the Declaration to work towards four commitments:
1. Understanding the impacts and dependencies of financial institutions on natural capital (directly and through customers) which can translate into material risks or opportunities;
2. Embedding natural capital considerations in financial products and services;
3. Achieving a global consensus for the integration of natural capital in private sector accounting and decision-making;
4. Achieving a global consensus on integrated reporting and disclosure.
In May 2013, a Roadmap for implementation was launched to mark the start of Phase II of the Natural Capital Declaration (NCD). The Roadmap identifies options to structure work under the NCD.
Financial institutions are invited to endorse the Natural Capital Declaration at CEO level. Non-financial institutions can also register their support for the initiative through the website. To find out more about endorsing or supporting the Declaration, please write to email@example.com.
For the latest information about the Natural Capital Declaration, please visit www.naturalcapitaldeclaration.org or follow the Twitter feed @NCDeclaration.
The Natural Capital Declaration is jointly managed by the UNEP Finance Initiative and the Global Canopy Programme.