In 2021, Sir Partha Dasgupta highlighted the essential role of natural capital in the green economy in his review, The Economics of Biodiversity. The review stated that our economies, livelihoods and wellbeing depend on nature, therefore making it one of our most precious assets.
Referencing this review, the parliamentary Environmental Audit Committee launched an inquiry on the role of natural capital in the green economy in July. The aim of this was to consider the current and future role of natural capital with a focus on financing the green economy.
The inquiry asked some really important questions about the contribution of private capital to secure nature recovery, plus the role of the green taxonomy and the risk of greenwashing. The inquiry also seemed to be asking how the UK could play an international role in establishing nature markets while attracting inward investment.
An IEMA workshop identified key points to develop a comprehensive response. The institute emphasised the importance of having an appropriate regulatory environment for nature markets to ensure transparency and success. This would include the government demonstrating what return on investment might look like to encourage outlay, helping to create capacity and good communications to support action such as case studies. Practical but robust, standardised ways to measure and monitor biodiversity credits and units over long periods are essential for both success and to avoid greenwashing.
The response also stated the need to deploy good operating principles based on the mitigation hierarchy, creating additionality, following the Lawton principles of the right thing in the right place, and an approach that is bigger, better and more joined-up. The response also pointed towards the Taskforce on Nature-related Financial Disclosures as a tool.
For IEMA’s full response, visit www.bit.ly/NaturalCapitalResponse