Natural Capital Champions are concerned with protecting Earth’s natural resources, preventing pollution and reducing waste. You may want to explore investments that support, or are aligned with, issues such as the conservation of marine resources or the sustainable use of land resources.
Why is it important to protect Earth’s natural resources?
Unsustainable patterns of consumption and production are significant causes of climate change, biodiversity loss and pollution. If humanity stays on its current development pathway, the Earth’s finite capacity will be unable to sustain the livelihoods of current and future generations.
According to the United Nations (UN), the world’s use of natural resources grew by 65% from 2000-2019. An increasing dependence on limited natural resources threatens already fragile ecosystems, affecting both human health and the economy. Reducing this pressure requires increased resource efficiency, coordination between nations, and collective efforts to promote sustainable economic growth.
The UN Sustainable Development Goals (SDGs) related to natural capital
In 2015 the UN adopted the 2030 Agenda for Sustainable Development, a blueprint for delivering peace and prosperity for people and the planet. At its heart are 17 Sustainable Development Goals (SDGs). You can use the UN SDGs to help direct investments towards the most pressing natural capital challenges.
The UN SDGs aligned with natural capital are:
SDG 12: Responsible consumption and production
Growing reliance on natural resources has set the Earth on an unsustainable course. Humanity must work together to develop strategies for resource extraction and food production that do less damage to local ecosystems and also ensure sustainable energy sources and supply chains for generations to come.
SDG 14: Life below water
Human activity is endangering the planet’s largest ecosystem – its oceans and seas – and affecting the livelihoods of billions of people. Combating the decline in ocean health requires intensified protection efforts and the adoption of solutions for a sustainable blue economy.
SDG 15: Life on land
Human activities have profoundly altered most terrestrial ecosystems, placing 40,000 species at risk of extinction over the coming decades. To support SDG 15, countries and companies can more sustainably manage the ecosystems on which they rely, protect sites critical to biodiversity, and enact conservation policies.
How to invest if protecting the Earth’s natural capital is important to you
Protection of the Earth’s natural resources can be reflected in a diversified investment portfolio by choosing managers that use environmental, social and governance (ESG) metrics, and corporate engagement, to manage risks, and identify opportunities as part of their overall investment process. This approach should include, where relevant, an assessment of how companies and issuers manage the Earth’s ecosystems and their commitment to sustainable patterns of production and consumption.
Such an approach can help investors ensure that financially material risks related to natural capital issues are accounted for in their portfolios, while still giving them the chance to grow their wealth and achieve their long-term financial goals.
If more targeted exposure is required, investors can also seek investments with an explicit focus on factors linked to the management of natural capital, or that look to make a direct impact on the preservation of natural capital – for example, by directly supporting schemes involved in issues such as the protection of water resources, pollution prevention, sustainable farming or the conservation of marine resources.
United Nations. The Sustainable Development Goals Report. 2022, https://unstats.un.org/sdgs/report/2022/The-Sustainable-Development-Goals-Report-2022.pdf