Hello!!!
And Welcome back!!!!
In this blog post, you will learn about an aspect of Sustainability which forms the basis of this fantastic concept.
CAPITAL
Before delving deep into the concept of Natural Capital, let us first understand what CAPITAL means. This layman’s definition is not for our economics and accounting geniuses. It is for ordinary mortals like myself.
So Capital in simple English means anything that benefits the owner and aids his future growth. There are two kinds of Capital: FIXED and WORKING. Fixed Capital includes factory, office space, furniture, and many more. While working Capital comprises the money or resources that one maintains to carry out the day-to-day operations of an organization. These two are kept under check because the running of the business will be grossly affected if there is excessive usage of the same. So, to SUSTAIN a business, the Capital has to be kept under check.
NATURAL CAPITAL
However, we are here to know about Natural Capital which supersedes the above two. Because our very existence on the Planet is determined by the continuity and expansion of this concept, understanding this idea is vital to know why sustainability has assumed paramount importance.
What is Natural Capital?
Natural Capital takes stock of the earth’s resources, implying:
-Inventory of renewable and non-renewable sources of energy
-evaluating soil, air, and water qualities.
-understanding the Geological aspects, which is a study of the Planet. It also emphasizes the rocks that are beneath the surface. And how they transformed and changed over some time.
– accounts for all the organisms’ animals, birds, and insects on the Planet.
NATURAL CAPITAL
What’s the need?
Accounting for these natural assets is imperative. They give the authorities and businesses a physical or monetary notion of the resources and the various ecosystems. In turn, it would help to employ actions that will further maintain and develop the three pillars of Sustainability- Economic, Social, Environmental. Failing to do so will lead to a complete collapse of the global ecosystem leading to catastrophic results.
Similarities between Business and Natural Capital
When we run a business, we aim to yield sufficient profits. For future growth and betterment, companies can utilize the income. And to also ensure that the Capital of the firm remains untouched.
The same concept and logic apply to Natural Capital. The income from the resources in terms of fruits, vegetables, wood, groundwater, forests, etc., should be utilized. We should not eat into the central reserves. Since the world has limited supplies, the preservation of Natural Capital for future communities and societies is of paramount importance.
The three Pillars of Sustainability primarily focus on devising ways and techniques, which will ensure the intelligent consumption of the world’s non-renewable reserves. Since they do not regenerate simultaneously, the focus must be on those sources present in abundance, like solar energy, wind energy, and geothermal power.
Facts:
However, in a practical sense, the opposite is happening. Due to overpopulation, humanity is consuming Natural Capital at an accelerated pace. For example, some cities and regions across the world have dangerously low groundwater levels. Again, the relentless hacking of green over leads to loss of habitat and the increase of carbon dioxide. Global warming and its dangerous side effects are already visible since the start of the new century. These are just a couple of examples, but in reality, the situation is bleak. The global ecosystem has become very fragile and needs protection and preservation at the earliest.
Anyways, stay tuned for more…
Bbye
Stay Safe
