Economy
Modern Magna Carta: the Natural Capital Declaration
During the 800th Magna Carta celebrations this year we took a look at the 1215 original and a series of modern ‘versions’ from the US Constitution to the UN Declaration of Human Rights and various conventions on climate change and sustainability, Magna Carta for the Earth. Today the Natural Capital Declaration.
What is Natural Capital? natural capital is the stock of ecosystems that yields a renewable flow of goods and services that underpin the economy and provide inputs and direct and indirect benefits to businesses and society. From the perspective of the financial sector, natural capital is a subset of environmental, social and governance (ESG) factors that can be material to financial institutions, mainly through their allocations of capital to companies through loans and investments or premiums as part of insurance contracts.
The Natural Capital Declaration was launched at the UN Conference on Sustainable Development (Rio+20) in 2012. It had been signed by the CEOs of more than 40 financial institutions, and demonstrated their commitment to the integration of natural capital considerations into private sector reporting, accounting and decision-making by 2020.
This built on the first Rio Earth Summit in 1992, when governments set a ground-breaking agenda for tackling environmental problems, establishing new conventions on biodiversity (CBD), climate change (UNFCCC) and desertification (UNCCD). Developing partnerships with the private sector in the time that followed saw public-private sector leadership partnerships, which increasingly began to question and respond to the material impacts that widespread ecosystem degradation creates for their businesses and the economy as a whole.
To position the finance sector response, UNEP Finance Initiative partnered with the Global Canopy Programme in 2011, to build support for the Natural Capital Declaration. The leading Latin American business school Fundacao Gerulio Vargas (FGV) was a third partner in the vital early phases of the NCD, and they continue to contribute as a supporter and a member of the NCD’s Steering Committee.