Advancing Ecosystem Valuation and Economic…
Sakis Kotsantonis

Sakis Kotsantonis Managing Partner, KKS Advisors

Katie Schmitz Eulitt

Katie Schmitz Eulitt Strategic Advisor, SASB

George Serafeim

George Serafeim Professor, Harvard Business School and Senior Partner, KKS Advisors

December 06, 2016

Advancing Ecosystem Valuation and Economic Development

Sakis Kotsantonis

Sakis Kotsantonis Managing Partner, KKS Advisors

Katie Schmitz Eulitt

Katie Schmitz Eulitt Strategic Advisor, SASB

George Serafeim

George Serafeim Professor, Harvard Business School and Senior Partner, KKS Advisors

December 06, 2016

Clean Energy Wind

Nature’s goods and services—e.g., food, raw materials, water flows, soil productivity, and a stable climate—underpin all human and economic activity. Despite broad recognition of this fact, our economic systems does not yet adequately account for nature’s value. That may be changing. From the adoption of the Paris Agreement on climate change to the Sustainable Development Goals, governments and the private sector are moving to internalize environmental externalities in investment decisions and measures of economic performance.

The Rockefeller Foundation envisions a future in which economic progress and thriving ecosystems go hand in hand. Each Revalue Ecosystems investment by the Foundation contributes to one or more of the following elements of a strategy to advance environmentally-aligned investment in public and private markets:

  • Knowledge and Demand: Build understanding and create demand among private investors, corporations, financial institutions and public agencies for robust measures of ecosystem value
  • Value and Measures: Strengthen and consolidate measures of ecosystem value and their integration into mainstream financial metrics
  • Accounting and Decision-making: Improve accounting, reporting and disclosure, decision-making tools and measures of financial performance to account for ecosystem value, as well as the regulatory environment underpinning their use
  • Environmentally-aligned Investment: Differentiate and scale investments that maintain or increase natural capital and the integrity of natural ecosystems and biodiversity

The Exhibit below provides a visual depicting how each of the Foundation’s different grantees fit into the landscape.

Capital Markets Ecosystem

The Natural Capital Project, deeply grounded in its academic roots of Stanford University and University of Minnesota, uses rigorous environmental science to create practical tools for private sector, public sector, and investment organizations to make better decisions. Both the Natural Capital Coalition and the Sustainability Accounting Standards Board focus on the role of accounting for natural capital in organizations. While the Natural Capital Coalition concentrates on enabling leaders of companies to measure natural capital and integrate these measurements in their operating and strategic decision making, the Sustainability Accounting Standards Board (SASB) focuses on developing industry-specific standards for reliable and comparable disclosure of financially material environmental, social and governance metrics, to meet investor demand for such information.

The Principles for Responsible Investment (PRI) is working to empower mediators of the capital market flows from investors to public and private sector organizations—credit rating agencies—to take into account natural capital in credit ratings and to enable broader financing of environmentally-aligned investing.

Grants to CERES and Climate Bonds Initiative help mobilize investors on climate and water, empowering allocation of capital and improving its alignment with environmental development. CERES is working with equity and fixed income investors to develop a practical tool that enables investors to take into account water-related risks and opportunities in making decisions. The Climate Bonds Initiative is developing The Climate Bonds Standard and Certification Scheme, which is designed as an easy-to-use tool for investors that assists them in prioritizing investments that truly contribute to addressing climate change.

None of these organizations alone can solve the problems the Foundation seeks to address but their collective work is forming new systems and infrastructure needed—by corporations and the societies they serve—to evolve and even thrive in a world of finite resources, strained by global megatrends.

The market is ready for their solutions. The Rockefeller Foundation Revalue Ecosystems grantees are developing better tools for measuring, harnessing, accounting for and investing in natural capital. We look forward to sharing their success stories with you over the coming months.