Natural assets and negative externalities

I came across the graphic below from a company called ‘Pollination’. It summarises the five groups of natural assets, how companies use these but more importantly the negative externalities the companies generate.

Nature, as is often emphasised, is in a state of crisis. For investors, this means the natural infrastructure underpinning our economy is deteriorating, depleting, and in some cases, at risk of sudden collapse. Evidence of this decline is apparent in global surveys of nature. In response, regulators, consumers, and policymakers are increasingly turning their attention to nature, leading to heightened scrutiny for businesses and investors. For instance, within the next 24 months, large companies across Europe are likely to be required to disclose their interactions with nature as part of mandatory reporting standards.

Natural assets are being degraded by a range of significant pressures, many of which are driven by business activities. These include land and water use (e.g., land cleared for development), resource consumption (e.g., water extraction), pollutant emissions (e.g., plastic waste or nitrogen runoff into waterways), the introduction of invasive species (e.g., feral rabbits), and climate change. Among these, the atmosphere represents the most immediate threat to human wellbeing through the impacts of climate change. The magnitude of this risk demands urgent attention and action. Fortunately, the frameworks, tools, and governance strategies developed to address climate change can often be adapted to manage other types of natural assets, providing a foundation for broader environmental solutions.

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