A Natural Capital approach to growth

Updated: Mar 30

Last week the government published its ENCA guidance - 'Enabling a Natural Capital Approach'. This is an acknowledgement of advice given by the Natural Capital Committee (an independent advisor to the government, led by Deiter Helm), and a fulfillment of a commitment made in the 25 year environment plan.


Natural Capital is the sum of the value of ecosystem services over time. What this means is that taking a natural capital approach involves recognising nature as an asset which provides flows of services to deliver benefits for society, wildlife and the economy. It has become a standard analytical approach to thinking about nature.


Ecosystem services can be divided into 3 broad groups:

- provisioning services (eg timber, food)

- regulating services (eg water regulation)

- cultural services (eg recreation)

A natural capital approach recognises that land can deliver multiple ecosystem services simultaneously - doing so would increase the natural capital value of that land.


Thinking about the natural environment this way is contentious, not least among 'purist' conservationists. It is appropriate to question the utility and benefits/concerns around such a reductionist approach to the natural environment. But it is also appropriate to consider that a natural capital approach may be vital to delivering the enhancement of our natural environment in the 21st century. It allows the natural environment to be reconciled with growth, which therefore allows it a place at the decision making table - a place that has not been forthcoming up to now.


Accounting for natural capital allows its value to be measured. This is useful in that it enables comparison before and after a specific intervention, to ascertain the environmental (in its broadest sense) impact of that intervention. This facilitates investment in natural capital - indeed the Agriculture Bill details the emergent Environmental Land Management scheme, which rewards farmers for delivery of 'public goods' (those ecosystem services not currently valued by traditional market mechanisms) - essentially paying them for improving natural capital value of their land ( https://www.gloucestershirenature.org.uk/post/elms-tests-and-trials-event ).


Nature based approaches can support numerous policy goals, and in this sense the concept of Natural Capital is closely aligned with Green Infrastructure:

- supporting physical health

- improving mental health

- productivity and industry

- housing and place-making

- reducing GHG emissions

- climate resilience.


There is growing interest in unlocking greater flows of private investment in natural capital. DEFRA have identified 6 project models:

- New woodland creation (timber sales and carbon credits)

- Peatland restoration (carbon credits)

- Biodiversity and natural capital net gain (developer mitigation)

- place-based strategic investment (management by charity of social enterprise)

- integrated catchment services (EA and private funders including water companies?)

- Sustainable urban drainage systems (water companies and local authorities)


The Gloucestershire Local Nature Partnership is supportive of a Natural Capital approach to growth. We have already begun a process of accounting for the natural capital of the county, with the support of all 6 District Authorities, GFirst LEP, the Environment Agency, Gloucestershire Wildlife Trust, University of Gloucestershire and others. Mapping the Natural Capital baseline will allow us to assess the impact of investment decisions on the stock of natural capital over time. It will also allow the identification of a portfolio of natural capital enhancement projects for investment. We hope to develop a Natural Capital Investment Facility which would facilitate such investment, with returns being financial, social and environmental.


The LNP believes this approach will enable enhancement of the natural environment, ensuring continuation of its provision of services that underpin a healthy economy, society and environment.


View the ENCA guidance here - https://www.gov.uk/government/publications/enabling-a-natural-capital-approach-enca-guidance


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