The Sigma Project

Introduction How to use Foreword Executive summary SIGMA Principles Principles at a glance Accountability The 5 capitals Natural capital Human capital Social capital Manufactured capital Financial capital Other approaches Management Framework Views on the Guidelines

‘Natural capital’ means the natural resources (energy and matter) and processes needed by organisations to produce their products and deliver their services. They include sinks that absorb, neutralise or recycle wastes; resources, some of which are renewable (e.g. timber, grain, fish and water), whilst others are not (e.g. fossil fuels); and processes, such as climate regulation and the carbon cycle, which enable life to continue in a balanced and healthy way.

Why it is important to organisations?
All organisations rely on natural capital to some degree and have an environmental impact. All organisations for example, currently consume energy and create waste (although some organisations have adopted zero waste or zero emissions strategies). Organisations need to be aware of the limits to our use of the natural environment¹ and the impact that they can have on it now and in the future, and operate within them.

Ways organisations can maintain and enhance natural capital²

Limit and reduce over time the use of substances extracted from the Earth’s crust.

Substitute abundant minerals for those that are scarce in nature.

Ensure that all mined materials are used efficiently within cyclic systems. Systematically reduce dependence on fossil fuels and use renewable resources instead.

Eliminate the accumulation of human-made substances and products in nature – substitute all persistent and unnatural compounds with substances that can be easily assimilated by natural systems. Eliminate waste, re-use, recycle or re-manufacture where possible.

Prevent the physical degradation of nature and protect and enhance biodiversity and eco-system functions.

Draw renewable resources only from well-managed and restorative eco-systems.

Systematically pursue the most productive and efficient use of resources and land.

Adopt the precautionary principle in any situation that may result in the modification of nature.

footnotes

1	Eco-footprinting studies have shown that if everyone on the planet were to adopt a UK lifestyle then we would require three planet Earths to sustain humanity. Source: WWF-UK Living Planet Report 2002.
2	This list draws heavily on the first three systems conditions of The Natural Step – a scientifically based, systematic approach for organisations to sustainably manage their resources and is designed to minimise risk and optimise opportunities.

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