Improving the natural capital data flow between governments and businesses in the EU

We Value Nature

Businesses and financial Institutions increasingly need high quality and relevant natural capital data. This is mainly driven by a growing awareness of risks related to ecosystem degradation as well as by the rapidly changing regulatory framework on external disclosure of corporate natural capital performance.

From a business perspective, there are challenges though, in meeting these data needs. Key challenges relate to the lack of harmonization and standardization of natural capital approaches, the often limited accessibility and quality of data, and an inadequate data infrastructure.

In terms of data infrastructure, a key issue is the disconnect between the business community and the statistics and scientific community, represented by governmental organizations in charge of natural capital data collection, such as National Statistics Offices [NSOs] and environmental agencies. Many of these governmental organisations are relatively unaware of the natural capital data needs of the business community.

An improved natural capital data flow from government to business would be a key enabler in increasing businesses’ sustainability performance and reporting. However, it also works the other way around. Governments too can benefit from improved natural capital data flows from the business community, not only for better policy making but also for tracking progress to international targets related to ‘zero carbon’ and ‘nature positive’, with the business community being a key stakeholder.

We Value Nature, together with the Capitals Coalition and its Combining Forces program has prepared a Position Paper offering concrete recommendations on improving the natural capital data flow between governments and businesses in the EU.

Three key recommendations are put forward:

  1. Governments (including NSOs) should recognize businesses as an emerging key user group of the natural capital data collected by public authorities
  2. Governments (including NSOs) should strive to make comprehensive national ecosystem accounts-based data available that is contextual and spatially relevant for business, at least at a landscape level (this can be a win-win for all actors)
  3. Business and government should combine forces and build on existing dialogues to establish a European dialogue platform covering both technical and institutional issues from both a supply and demand perspective.

Business needs in terms of natural capital data can be summarized as contextual and spatially referenced information, at least at a landscape level. An increasing number of businesses want to measure their impacts and dependencies on natural capital. They are therefore looking for solid and sufficiently granular data on the type and condition of ecosystems that are affected by their activities, as well as species in these ecosystems. They also look for information on ecological thresholds that should not by exceeded by their dependencies on nature (e.g. water extraction) but this type of information is often hard to find. As businesses will need to report on business or financial risks related to ecosystem degradation, information on scenarios of ecosystem degradation and ecosystem restoration would be useful. Impact investors as well as businesses aiming for 'nature positive' would welcome information on priority areas for ecosystem restoration as investment opportunities. Fortunately, the volume and quality of information is rapidly growing, but much more can be done.

The SEEA EA (System for Environmental Economic Accounting - Ecosystem Accounting) provides a good basis. For a more general uptake by the business community, these data should be made more granular and complimented with additional data such as threats to natural capital, ecological thresholds, and ecosystem change scenarios.

So far, good practice examples on how public level natural capital data can be tailored to businesses needs and on how businesses are using these data remain relatively scarce. There is a need for many more examples to help trigger the interest and understanding of the wider business community.

Download the policy paper