The University of Cambridge Institute for Sustainability Leadership (CISL) has developed a new metric to help businesses consider their impact on the natural environment for use in key operational decision-making processes.

The new metric was launched at the Royal Society in London last week at an event attended by over 50 participants, including 25 businesses - the metric will help companies reduce their impact on biodiversity, soil and water – natural resources which are crucial for business continuity and preserving the Earth’s ecosystems.

The companies discussed the need to establish credible science-based measures that can drive improved business performance. Many organisations are increasingly interested in considering and demonstrating their impacts on the natural environment and have been calling for a simple, practical metric that can be used in key decision making processes.

A need has been identified for a single impact metric which is both simple and influential for decision-making across corporates and investors. The challenge is to identify metrics that are relevant for businesses’ decision-making processes, whilst being simple and practical for investors to use.

CISL has worked with companies of the Natural Capital Impact Group (NCIG), leading NGOs and academics to develop the Healthy Ecosystem Metric. The new concept and tool has the potential to improve long-term management of natural capital by companies, and drive change across different industries.

Yorkshire Water and Anglian Water are both members of the NCIG -the network of companies works collaboratively to determine how business can sustain the natural world and its resources through its strategies and operating practices.

There is an existing plethora of methodologies, standards and tools to help companies understand their interaction with the natural environment. However, there is a need to provide specific information for companies to measure and demonstrate impacts upon the natural environment in a consistent way.

Commenting on the new metric, Dr Gemma Cranston, CISL's Director, Natural Capital said:

“Businesses lack both a rigorous evidence base and metrics that can help determine which raw materials and sourcing locations pose a greater risk, and what types of response strategies are most appropriate.”

“The healthy ecosystem metric will provide companies with an indication of the scale of the impact they are having and where there are opportunities to reduce their impact through their operational decision-making.”

CISL has now published a working paper as the first step towards a proof of concept for the metric which builds upon existing approaches and guidance with the aim of providing consistent, context based metrics that can support corporate decision-making and demonstrate positive impacts. The next step is to test it with companies and investors in real business contexts.

The proposed metric is based on the impact of a company upon the quality and quantity of biodiversity, soil and water. The paper details how the metric is constructed with a specific focus on the biodiversity sub-component.

The Healthy Ecosystem Metric will help companies:

• Measure the impact from sourcing raw materials on biodiversity, soil and water in global supply chains
• Identify high-risk locations where a company is most likely to experience biodiversity, soil and water risks or create negative impacts
• Drive credible impact data that companies can use to develop targets or KPIs
• Inform response strategies to safeguard natural capital and drive improved business performance

Andy Murray, Chief Customer Officer, ASDA and Chair of the NCIG said:

“The Healthy Ecosystem Metric (HEM) provides a comprehensive way to get moving on change…It is a game changer for businesses like ASDA and it gives us more confidence that we’re making the best choices possible.”

Click here to download the CISL working paper