The recent launch of the Natural Capital Declaration at the Rio+20 conference last week was the first time that business, finance, and governments came together to place a monetary value on natural resources and the environment. Thirty-nine financial institutions signed on to the declaration, including banks, investment funds and insurance companies.
Yet not all stakeholders are enthusiastic about the declaration. BankTrack, a respected Netherlands-based nongovernmental organization that engages with the financial sector to encourage sound environmental and social practices, has publicly objected to the declaration's monetization of the environment.
The declaration is a voluntary initiative. Signatories aspire to build understanding and support the development of mechanisms to integrate natural capital -- which they define as Earth's natural assets and ecosystem services—into institutions' financial decisionmaking. At present, "no methodology yet exists to adequately report or account for Natural Capital in the global financial system," the declaration states.
The signatories are emphatic, however, in calling on governments to require corporations to report on their dependence and impact on natural capital. They also call for regulatory action to "discourage business from eroding Natural Capital, while at the same time offering incentives to companies that integrate, value and account for Natural Capital in their business model."
By endorsing the Declaration, the signatories seek to "demonstrate our commitment to the eventual integration of Natural Capital considerations into private sector reporting, accounting and decision-making, with standardization of measurement and disclosure of Natural Capital use by the private sector."
Achim Steiner, Executive Director of the United Nations Environment Program (UNEP), stated, "Factoring natural capital into the bottom line is about bringing the real wealth of the planet from the invisible into the visible spectrum in order to tip the balance from degradation towards sustainable management for communities, businesses, and countries."
Next page: Conflicting opinions