Challenges
Natural capital (NC) refers to a concept or framing, with a focus on the stocks and flows of services that nature provides to society, and specific datasets. This concept has seen growing attention over the last decade and improving the data, as it is hoped, may assist in greening decision-making, in various sectors and venues, ranging from policy through financial investors, to farm level.
Scotland is a pioneer in adopting natural capital: a Scottish Government Natural Capital Policy team is working to embed Natural Capital into policy processes, framed around the Four Capitals approach; whilst multiple initiatives within NatureScot’s Natural Capital Pilot Programme (NCAPP) explore how to work with it with different groups and levels. Other notable initiatives directly relevant to natural capital include SEPA’s One Planet Choices initiative, which uses integrated capital assessments. The general goal of all such initiatives – and that this project seeks to both learn from and inform – is to routinely embed consideration of natural capital across sectors, policies and levels.
Natural capital is not a single, simple or easy-actionable piece of information. It has multiple and contingent versions and interpretations; will not be the only form of knowledge used in interpretation; furthermore, interacts with interests and institutional structures when influencing decision-making processes. These interacting factors often tend to inhibit change. Achieving transformation in support of sustainability is thus an urgent challenge but also notoriously difficult. Identifying levers of change is vital to ensure future research and practice efforts are most appropriately and effectively focused. There is a need to critically appraise how and when natural capital can support change for sustainability.
Questions
- Where are the opportunities for Scottish policymakers to embed natural capital and four capitals approaches in policymaking, and what would the impact of a natural capital approach to policymaking be?
- Where are the opportunities to develop revenue streams from investment in natural assets, or to incentivise increased investment in nature-based solutions by other means? How valid are these? What risks are associated with them? And how applicable are they in a Scottish context?
Solutions
The main aim of this project is to produce constructive insights about the most productive venues (territorially and sectorally) and approaches (how and with and for whom) for using natural capital concepts and data to galvanise change for sustainability.
Reviewing international practices
We are reviewing and generating insights based on innovative, international practices relevant to Scotland in governing with natural capital. This is covering systematic mapping and rapid evidence appraisals, interviews, and a summary of international innovative practices relevant to Scotland.
Analysis of natural capital in Scottish policy
We are co-constructing an analysis of natural capital in Scottish policy processes. Based on transdisciplinary collaboration with Scottish government policy peers, this research ‘walks along’ with policy to explore when and how Natural Capital concepts and data might influence policy planning and evaluation processes. The target policies are influenced by policy stakeholder experiences, preferences, and policy windows.
Evaluating opportunities and consequences
We are evaluating opportunities and consequences of markets and blended finance for natural, economic, human, and social capital. This responds to evolving practices and opportunities arising from Scotland’s Route Map to £1 billion, and any other initiatives. This is delivering a review of future private schemes and finance mechanisms and public-private blended finance options and a report on pilots of blended finance for natural capital policy in Scotland.
Private-sector investment in nature-based solutions
We are exploring how natural capital concepts can unlock private-sector investment in nature-based solutions. This is understanding private sector motivations and contributions and requirements for governance approaches to maximise appropriate private sector involvement in the Scottish context.
Project Partners
Progress
This project explores if and how the concept of NC can influence decision-making in support of sustainability and a just transition. This project explores how and when it is most productive to employ this concept. We have 5 strands of research that span engagement and study of decision-making in the private sector, including but not limited to finance, and the public sector.
(1) Exploration of international examples of the use of NC - both in policymaking and finance. This strand is on track. These reviews were originally planned to be systematic maps but on agreement with policy contacts we have changed to a less restrictive method which is more likely to detect any cases that offer insights for Scotland.
(2) Exploration on if and how NC is or could be used in Scottish policy processes is on track, with an established conceptual and methodological plan in place. Plans have been agreed upon for in-depth research with aspects of decision-making in the agricultural policy domain, and a parallel exploration of awareness and use of existing NC-related tools across several policy domains.
(3) An evaluation of opportunities and consequences of markets and blended finance is on track; with plans in place to study blended finance mechanisms that could de-risk and leverage more private investment in peatland carbon projects, that will also support the team developing Scotland's first Natural Capital Investment Framework, which will ensure that future investment delivers real benefits for climate, nature and rural communities.
(4) Research focusing on understanding how NC may motivate or enable private sector actors to support nature-based solutions (due to start later in 2023).
(5) Engagement with academic and non-academic stakeholders. This strand is on track. We have carried out a stakeholder analysis and plan for impact, which has shaped and embedded our engagement and research. We have a constructive first meeting with our advisory group, built academic networks by presenting on the topic at events ranging from academic conferences (Annual International Conference - RSG) to professional and practitioner-oriented meetings (e.g., Nature Finance UK 2023 Ecosystems Knowledge Network and the Chartered Institute of Ecology and Environmental Management (CIEEM) annual meeting) and have had many meetings with stakeholder contacts, especially but not limited to the Scottish public sector.
Impact resulting from this project
In conjunction with researchers working on similar projects, we have contributed to refreshing of the Natural Capital Asset Index (NCAI) in Scotland, have steered the Scottish Forum for Natural Capital Sustainable Land Management Group (SFNC SLMG) and have been invited to comment on initiatives such as the UK Transmission Operators BIOINSTINCT tool, and the newly proposed UK Infrastructure Bank (UKIB). Output from this project can be viewed here with a bimonthly newsletter also being available; to subscribe please contact the team for more details.
Related Projects
Natural Asset Inventory and Natural Capital Accounts: the aim is to develop a spatially-referenced register of Scotland’s natural assets and contribute to a set of natural capital accounts for Scotland that can over time track the progress of Scotland's green growth aspirations.
- Natural Capital
- 2016-2022