Measuring and valuing (in qualitative, quantitative and monetary terms) is crucial to gather convincing data on a company’s impacts and dependencies on natural capital. The methodologies offered by InVEST, ESR, LC(I)A, ReCiPe, TIMM, True Value and CEV are considered helpful in this phase.
Measure impact drivers/dependencies and changes in natural capital
In order to measure the impact drivers or dependencies, a company must map the activities against impact drivers or dependencies, define which drivers or dependencies to measure, identify how to measure them and then collect data. Then, the changes in the state of the natural capital (those associated with internal business activities and with external factors) are measured.
All this happens on the qualitative or quantitative level. An all-embracing method is the Integrated Valuation of Environmental Services and Trade-offs (InVEST): open-access software that helps companies map, quantify and monetize ecosystem services. One of the most prominent qualitative methods to determine priorities, opportunities and risks of ecosystem services, is the Corporate Ecosystem Services Review (ESR).
On a quantitative level, Life Cycle (Impact) Assessments (LC(I)A) analyse the life cycle of products and services, usually leading to an ‘inventory’ of emissions towards air and soil, consumed resources, et cetera. The ReCiPe tool transforms such inventory results into a limited number of indicator scores. For measuring value-chain externalities, companies can utilize the methods of True Price, Trucost, PwC (TIMM) and KPMG (True Value). These frameworks express social, environmental, fiscal and economic consequences in economic value, leading tot he ability to compare consequences for company strategy and investment choices.
Natural Capital Coalition (2016a), p. 53-79.
ESR.
True Price, Deloitte, EY & PwC (2014).
Value impacts and/or dependencies
In order to value the impacts or dependencies, companies ought to define the consequences of impacts or dependencies, determine the relative significance of associated costs and benefits, select an appropriate valuation technique and then undertake or commission the actual valuation.
This valuation can be qualitative or quantitative, as well as monetary. When valuing the impacts or dependencies in monetary terms, one can make use of the Guide to Corporate Ecosystem Valuation (CEV): a framework that enhances decision-making processes within companies by monetizing ecosystem services.
Natural Capital Coalition (2016a), p. 80-93.
