11 March 2024 - We are delighted to announce that Arcadis has been awarded “DFI of the Year” (DFI: Developments for Financial Institutions) for its work on natural capital risk assessment and valuation at the 2023 Infrastructure Journal Global Awards.
Under the aegis of The European Bank for Reconstruction and Development (EBRD), Arcadis and IDEEA Group developed the Natural Capital Valuation (NCV) model to provide stakeholders with the means to include financing and nature conservancy in decisions.
The model identifies and values nature-related risks at a landscape scale, to identify and prioritise nature positive investments and assess/improve a project’s nature performance. As a natural capital risk assessment tool, the model provides quantitative and monetary information on the current (baseline) and evolving (business as usual scenario and sustainable scenario) state of nature and related risks and opportunities for nature, communities, businesses, and investors.
The NCV model provides a flexible tool to understand the impact of investments and dependencies on nature, as well as their nature-related risks and opportunities with greater transparency by presenting information as natural capital risk heat maps and investment opportunity tables. As a tool it identifies, prioritises, and substantiates nature related risks and investment opportunities, translating them into economic terms using a standardised framework.
The NCV Model approach has three main outputs:
- A nature-related risk heat map, which charts key nature-related risks in a landscape of interest against their anticipated impact and likelihood. This offers a guide on where an investment can have the greatest positive impact for nature.
- A quantitative scenario analysis, which evaluates how the value of ecosystem services in a landscape of interest might evolve over time under a “business-as-usual” (BAU) as well as a “sustainable future” scenario. This provides an indication of the value at risk from sticking with the BAU scenario as well as the return on investment that could be captured from efforts to implement more sustainable activities.
- A list of priority nature-related risk management actions and investment opportunities, whichhighlights the activities that would most effectively protect and enhance natural capital in a landscape of interest. All actions and opportunities are scored in terms of their contribution to a broad range of environmental, economic and social indicators (including SDG indicators).
The NCV Model is fully aligned with the definitions and disclosure requirements of CSRD, TNFD and GRI and supports target setting according to SBTN (Science Based Targets for Nature). The NCV Model is complementary to and can be integrated in existing climate risk assessment approaches by corporates and banks.
It is a tool applicable across landscapes and sectors as well as cross border landscapes and has been applied to a regional solid waste management facility in Serbia; Red Sea tourism in Egypt; assessment and optimisation of urban planning in China; river management and agriculture issues related to the Aral Sea, Uzbekistan and Kazakhstan; sustainable development of the Issyk-Kul Lake, covering tourism, agriculture and fisheries, Kyrgyzstan.
The model has allowed EBRD to identify investment opportunities, rank them according to their positive impacts on nature, economy, and UN Sustainable Development Goal (SDG) indicators. Though developed for financial institutions, it has significant potential applicability for private investors, funds and banks well as investment portfolios.
One of the judges said: “I think this submission shows Arcadis leading the field and the NCV has implications and uses beyond those for which it was created. This work sets Arcadis apart and sets new market standards for affording a monetary value to biodiversity and thus a way to incorporate biodiversity into a positive return profile.”
Comments were rounded off with: “This is likely to be increasingly important as institutions take a more holistic view of activities and it seems to be something that meets criteria of innovation, impact and creating a standard.”
Solving the global biodiversity and nature crises presents enormous challenges, necessitating major shifts in how the private sector assesses risk and allocates capital. Arcadis is proud to play at the forefront of the transition to a carbon neutral, nature positive and equitable world. Infrastructure Journal’s award is a well-deserved recognition of Arcadis’ continuous efforts in this field.
For over 18 years, the Infrastructure Journal Awards have celebrated achievements and innovations in the infrastructure and energy spaces. Arcadis’ recognition at this year’s event is a testament to its leadership in sustainability and frontrunning position in terms of natural capital and biodiversity solutions for the private sector.
