The government should do more to encourage businesses to value and report on natural assets such as flood plains, and soil and water quality, the Natural Capital Committee (NCC) has recommended.
In its fourth annual report to government, the committee said investment by the private and public sector would be required to deliver the government’s 25-year plan for nature.
The report outlines that the loss of natural capital is imposing significant costs on the UK economy and businesses, and these are often not sufficiently recognised and tend to be excluded from economic indicators of progress, such as GDP.
However, the committee believes the costs are increasingly apparent, with more flooding, further decline in soil quality and pollinator numbers, more air pollution and an accelerating loss of outdoor recreation areas.
Much of England’s natural capital is owned and controlled by the private sector, the committee noted. It said the government should actively promote corporate natural capital valuation, accounting and reporting to ensure natural assets are properly managed. Public sector bodies should also value natural capital assets, and use valuations to guide investments in improving these assets and the benefits they provide, it added.
A coalition of private sector organisations last year published the Natural Capital Protocol, a tool to develop a common framework and procedures for monitoring, measuring and valuing natural capital.
The NCC has developed its own approach to producing natural capital balance sheets based on a register of assets. It has also created a framework for incorporating valuation techniques to guide investments designed to improve natural capital. These guides will be launched shortly, it said.
The NCC praised organisations that already value and account for natural assets, including Lafarge Tarmac, the Environment Agency and the Duchy of Cornwall.
The committee urged the government to speed up the publication of its 25-year plan for nature, which had been delayed by the vote to leave the EU, with the initial version published before the end of 2017 as originally scheduled. ‘This timetable will maintain and capitalise on the momentum and enthusiasm which has been generated thus far,’ its report says.
The report also recommends that:
- the new National Infrastructure Commission incorporate natural capital, including its maintenance, restoration and recovery, into long-term infrastructure plans;
- the 25-year nature plan should be put on a statutory footing, with governance and accountability of should be assigned to a specific lead institution;
- the plan should form a key part of proposals for British agricultural policy from 2020 and be integrated with plans for food and fishing;
- the powers and duties of national park authorities should be extended to support the objectives of the plan; and
- the Treasury’s official guidance on project appraisal should incorporate natural capital in identifying priorities and appraising investment proposals.
Karen Ellis, chief adviser on economics and development at WWF-UK, said Brexit provided the opportunity to rethink policies, such as the EU Common Agricultural Policy. However, she added: ‘It must set ambitious, measureable goals, and a legally enforceable action plan to deliver these, involve all government departments in the delivery of the plan, provide sufficient investment to achieve these targets, and include a goal measuring the UK’s impacts on the environment abroad through the products we import.’
