Companies increasingly measure and value the natural resources – or natural capital – used in their operations, shifting financial assessments beyond traditional income statements and balance sheets. This expansive approach enables firms to track their use of natural capital and production of benefits as well as associated impacts. By tracking the use of water, energy, soil, and other natural resources and related emissions, companies can measure their progress in strengthening bottom lines while improving environmental and societal outcomes.
In identifying and quantifying a value chain’s dependence on various ecosystem services – e.g. precipitation, soil quality, and pollination – companies that perform natural capital measurement and valuation provide information vital to strengthening corporate performance and building environmental resiliency. A robust understanding of a company’s use of natural capital helps the firm mitigate risks, as well as identify and exploit opportunities to increase profits and reduce losses. In many cases, the natural capital value chain affects not only the company’s natural resource base but also the livelihoods of local stakeholders.
Indufor helps companies together with local stakeholders to identify the material impacts and dependencies in their value chain. In consultation with firm management, we develop customised measurement and valuation techniques. In decades of work, we have developed guidance for forest sector entities on how to incorporate natural capital valuation in their decision-making and, as a member of the Natural Capital Coalition, we have contributed to the Natural Capital Protocol’s Forest Products Sector Guide.
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
We combine services on sustainability metrics with expertise in forestry and natural resource management and environmental and social standards. Depending on our client’s needs, we 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 private companies, we support other organisations, including governments seeking to understand a particular sector’s reliance and impacts on natural capital, specific interventions’ outcomes, development trajectories, and natural capital’s contributions to the broader economy and social welfare.
- IFC Natural Capital Program: Rwanda, Indonesia, Philippines
- Omidyar Network Rural Valuation Tool