Companies are starting to consider the value of natural resources in making business decisions, a practice that will become increasingly important as those resources become further constrained, corporate representatives say.
The practice, called natural capital accounting, is a way for companies to accurately assess and manage risk, maintain their social license to operate, manage or lower operating costs, and secure a competitive advantage, the representatives say.
Increasingly scarce resources, growing competition for those resources, and population growth are some of the factors prompting companies to look at valuing and protecting natural capital, said Denise Knight, sustainable agriculture director for The Coca-Cola Co.
Companies like Coca-Cola are working one-on-one with organizations such as The Nature Conservancy (TNC) and the World Wildlife Fund to assign a monetary value to natural resources, such as clean water, and the services they provide and then use these calculations in making business decisions. Efforts to establish standard methodologies across companies or industries for conducting natural capital accounting are under way, but still in the early stages.