Monetising Natural Capital for Energy Assets

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Monetising Natural Capital for Energy Assets

2015-09-10

Businesses today face many disruptive forces and potential economic uncertainty particularlywith regards to future energy price, security of supply and policy.

 

This uncertainty is bringing a heightened focus on the true sustainability of all energy generatingassets and we are starting to see specific sustainability criteria being imposed via governmentincentive policy but equally from the investment community. The valuation of our impact on theplanets natural capital is supported by the United Nations and the Principles of ResponsibleInvestment of whose members have in excess of US$30 trillion under management.

 

To establish a business sustainable evaluation of our energy assets we needed to measure andprotect what nature gives us for free and remove that economic invisibility to ensure that futureincome and growth are sustainable.

 

An Environmental Profit & Loss Account is a means of placing a monetary value on theenvironmental 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 supplyof water, or the disposal of waste, the true costs of our environmental impacts remain externalizedand unaccounted for. The EP&L represents how much we would need to pay for the impacts wecause and the services nature provides.

 

The staggering predictions of £110billion of funding expected mainly from the private sector,required to upgrade and replace the UK aging infrastructure will come from many of thesemember organisations.

 

We have an incredible opportunity, whilst realising this infrastructure overhaul, to ensure our energyfuture is built on sound natural capital credential which will serve our communities for generationsto come.

 

There is an increased momentum for investment appraisals to evaluate on a double or triplebottom line approach of economic, environmental and social community impact and the GreenInvestment Bank is one of the leading members of the financial community to use this to evaluateas part of its return and impact on investment.

 

In establishing a measurement of the impact on the environment for energy generating assets asa long term credible investment we had to establish a value on nature and measureperformance against an recognised industry benchmark.

 

In this file, chapters evolve in concert 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.

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Key Words: Energy; Utilyx