Mapping natural capital depletion: how investors can identify portfolio exposure and take action
May 20, 2021
The PRI and UNEP-WCMC have developed maps to showcase hotspots of relative natural capital depletion on a global scale, available for visualisation in ENCORE (Exploring Natural Capital Opportunities Risks and Exposure), an interactive, online tool that highlights how businesses may be exposed to accelerating environmental change.
The interactive maps that the PRI and UNEP-WCMC have developed can help investors identify potential portfolio exposure to natural capital depletion. When using the maps, investors should consider the risks that hotspots present to businesses in two particular instances:
When a large proportion of an ecoregion or habitat overlaps with a hotspot of natural capital depletion, it threatens the ecological balance and the ecosystems’ ability to deliver services. This is particularly relevant if a business depends on the natural capital asset for which the hotspot has been identified, as the business activities will be at higher risk. However, there would also be the opportunity to mitigate the depletion of those assets.
When hotspots of all four types of natural capital asset overlap, it increases the risk of disrupting ecosystem services. A wider range of business activities will be affected in these areas.
The analysis also compares the location of marine natural capital assets with the location of cumulative human pressures that may deplete those stocks.
Click on this link to re-direct to the summary of the methodology behind the maps and here you have access to a test case that provides an example on how investors can use the ENCORE tool to identify potential exposures in their portfolios to natural capital depletion.