Guest Blog: Mark Stokes – How much natural capital does your energy rely on?

You can’t put a price on nature, right? Well when it comes to business, some are beginning to – especially when measuring how much they are using of the world’s […]

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By Vicky Ellis

You can’t put a price on nature, right? Well when it comes to business, some are beginning to – especially when measuring how much they are using of the world’s natural ‘capital’.

Businesses today face many disruptive forces and potential economic uncertainty, particularly when it comes to future energy prices, security of supply and policy.

This uncertainty has thrown a heightened focus on the true sustainability of all energy generating assets – and we’re starting to see sustainability criteria imposed, through government incentives but equally from investors.

Valuating our impact on the planet’s natural capital is something the United Nations supports along with its group the Principles of Responsible Investment, whose members manage more than US$30 trillion.

Accounting for nature

By making nature less economically invisible – and measuring and protecting what nature gives us for free – we can make sure future income and growth are sustainable.

An Environmental Profit & Loss Account is a way to put a monetary value on the environmental impacts along the entire supply chain of a given business.

Though we pay fees to utilities and local authorities for services such as the treatment and supply of water, or the disposal of waste, it’s all too easy for the true costs of our environmental impact to be externalised and unaccounted for.

That’s why we’ve just worked with Trucost to calculate the environmental benefits of the energy centre at a hospital in Addenbrooke.

In monetising environmental impacts, Utilyx is also future proofing business against future policy and legislative changes which are likely to occur in the coming years such as taxes on carbon, greenhouse gases and other aspects of the ecosystem.

Get with the E P&L programme

Puma’s recent Environmental Profit & Loss at a corporate level is one example of the powerful influence governance and leadership can have in transforming a business’s true sustainability vision.

International momentum in this area is rapidly gaining the attention of global organisations and accounting bodies and how they can weigh up the environment. It’s not currently valued in a typical Profit & Loss account.

As our own Environmental Profit & Loss reports show, decentralised generation of heat and power is both an economically efficient and practical solution to the UK’s energy problem. It has potential for a significant impact on decarbonising the UK’s electricity system.

This new chapter of our energy future must evolve hand in hand with business models that are scalable, viable systems on the ground, delivering critical and affordable low carbon energy in a way that is monetised and sustainably accounted for both environmentally and financially. Business can do nature in numbers.

Mark Stokes is Managing Director of Utilyx Asset Management, find him on twitter at @markelstead or @utilyx