Publication / 15 Apr 2013

Natural Capital at Risk: The Top 100 Externalities of Business

TEEB commissioned Trucost to produce a high level perspective on the world’s biggest natural capital risks for business, investors and governments.

Trucost has undertaken this study on behalf of the TEEB for Business Coalition. Findings of this report build on TEEB’s The Economics of Ecosystems and Biodiversity in Business and Enterprise and the World Business Council for Sustainable Development’s Guide to Corporate Ecosystem Valuation by estimating in monetary terms the financial risk from unpriced natural capital inputs to production, across business sectors at a regional level.

By using an environmentally extended input-output model (EEIO), it also estimates, at a high level, how these may flow through global supply chains to producers of consumer goods. It demonstrates that some business activities do not generate sufficient profit to cover their natural resource use and pollution costs. However, businesses and investors can take account of natural capital costs in decision making to manage risk and gain competitive advantage.

The primary production and primary processing sectors analyzed in this study are estimated to have unpriced natural capital costs totaling US$7.3 trillion, which equates to 13% of global economic output in 2009. The majority of unpriced natural capital costs are from greenhouse gas emissions (38%) followed by water use (25%); land use (24%); air pollution (7%), land and water pollution (5%) and waste (1%).

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