Companies are increasingly measuring and valuing the natural resources or natural capital used in their operations, shifting beyond traditional income statements and balance sheets. This enables them to track their use of natural capital and generation of benefits, as well as impacts. By routinely tracking the use of water, energy, soil, and/or other natural resources and related emissions, companies can measure their progress in strengthening their bottom lines while improving their broader footprint on environment and society.
By identifying and quantifying the dependencies of a value chain on various ecosystem services, e.g. precipitation, soil quality, and pollination, natural capital measurement and valuation can provide critical information, which enables strategies to strengthen corporate performance and enhance the environment. An increased understanding of the company’s use of natural capital aids in mitigating and preventing risks, recognizing and exploiting opportunities and can help increase profits and/or reduce losses. In many cases, the value chain affects not only the company’s relevant natural resource base, but also the livelihoods of local stakeholders.
Indufor supports companies in identifying the material impacts and dependencies in their value chain together with local stakeholders. In discussion with companies, we develop customized in-depth measurement and valuation techniques. We have actively been developing guidance for the forest sector to incorporate natural capital valuation in their decisionmaking, including contributing to the development of the Natural Capital Protocol’s Forest Products Sector Guide as a member of the Natural Capital Coalition.
Our services in this area include:
- Value chain analysis
- Landscape analysis
- Risk assessment
- Impact measurement
- Natural and social capital valuation
- Cost-benefit analysis and scenario planning
- Training on valuation techniques
Our offerings on sustainability metrics are paired with strong expertise in forestry and natural resource management, and environmental and social standards. Depending on the client’s needs, we can provide concrete recommendations on changes in management practices or policies, and guidance on compliance and disclosure in accordance with mandatory or voluntary standards.
In addition to working with companies, we provide support to other organizations, for example to government seeking to understand a particular sector’s reliance on or impacts to natural capital, the impacts of certain interventions or development trajectories, and in turn the contributions of natural capital to the broader economy and social welfare.
- IFC Natural Capital Program: Rwanda, Indonesia, Philippines
- Omidyar Network Rural Valuation Tool