What's the Latest Development?
The World Bank and 43 other financial institutions have begun preliminary work on calculating the monetary worth of the Earth's natural capital, which they declared as "the Earth's natural assets (soil, air, water, flora and fauna), and the ecosystem services resulting from them, which make human life possible." They also want to force companies to reveal how they use these assets in their financial reports, and offer incentives and penalties for their preservation or destruction.
What's the Big Idea?
The effort is an output of last year's UN Conference on Sustainable Development -- also known as Rio+20 -- at which governments committed to better integration of social, political and environmental actions. However, the banks admit that putting a value on natural assets will be a huge challenge. Project member Liesel Van Ast says bankers will "need to address how they will account for natural capital, explain to everyone why they need to do it and then tell them how to do it." The banks have given themselves until 2020 to come up with a functional valuation system.
Photo Credit: Shutterstock.com