title: Exploring Natural Capital Opportunities, Risks and Exposure (ENCORE)
Creators: name: United Nations Environment Programme World Conservation Monitoring Centre
name: Natural Capital Finance Alliance
Publisher: name: United Nations Environment Programme World Conservation Monitoring Centre
Year: 2020
Subjects: subject: FOS: Earth and related environmental sciences
subject: FOS: Natural sciences
subject: FOS: Biological sciences
subject: FOS: Other natural sciences

description: ENCORE (Exploring Natural Capital Opportunities, Risks and Exposure) is a tool to help users better understand and visualise the impact of environmental change on the economy. By focusing on the goods and services that nature provides to enable economic production, its guides users in understanding how business across all sectors of the economy potentially depend and impact on nature, and how these dependencies and impacts might represent a business risk if environmental degradation continues.
description: Dependencies on ecosystem services

Using existing classifications of both ecosystem services and economic sectors, the current body of relevant information on ecosystem service dependencies for all economic sectors was reviewed and current gaps in knowledge were identified. Literature reviews were carried out for each ecosystem service class and production process combination using Web of Science, Google and key document searches, for example TEEB for Business, with standardised search terms, and targeted website searches, including leading companies in the sector and industry initiatives.

Expert interviews were conducted with sector specialists to validate information for some dependencies given the absence of information on ecosystem service dependencies identified through literature reviews. This resulted in a comprehensive assessment of which of the 21 ecosystem services each of the 167 economic sub-industries depend upon for their production processes.

Underpinning natural capital assets and potential drivers of environmental change

After linking economic sectors to the ecosystem services they depend on, it is important to understand how these services are provided by natural capital assets and how they might be influenced by drivers of environmental change such as pollution and climate change. Identifying the natural capital assets underpinning each ecosystem service and the potential drivers of environmental change that could impact them in a way that materially affects business performance enables financial institutions to understand what is important for service provision and what could lead to risk of disruption.

Factsheets were produced for each ecosystem service outlining the following information: a description of the ecosystem service-natural capital asset system, identification of the main drivers of environmental change influencing or impacting the system and the mechanism by which these impact ecosystem service provision. Web of Science, Google and key document searches, for example TEEB for Business, with standardised search terms were used to compile factsheets for all ecosystem services according to a pre-defined template.

Summary tables in each factsheet provide a quick overview of the natural capital assets most important to service provision and the drivers of environmental change that are likely to influence them. Importance here is defined as the sensitivity of the ecosystem service to a change in the state of the natural capital asset, and degree of dependence of the ecosystem service on the natural capital asset. Influence is defined as the degree to which the natural capital asset is susceptible to the driver of change, and the degree of variability and uncertainty in the response of the natural capital asset to the driver of change.

A framework was developed with Red-Amber-Green criteria to assess the importance of natural capital assets to ecosystem services, the influence of drivers of environmental change on natural capital assets and to provide contextual information on the drivers of environmental change. This framework was developed in collaboration with the Natural Capital Finance Alliance team, and reviewed internally and externally by key players in the natural capital and scientific community. Each assessment is accompanied by a justification for the Red-Amber-Green rating.