Capitals Framework

Natural capital

Natural capital comprises the world’s stock of natural assets: soil, air, water and all living things. For each company, we analyse three key aspects of natural capital: carbon, biodiversity and water.

3 Aug 2022

9 minutes

Stephanie Niven
Sam Anthony
Stephanie Niven
Portfolio Manager
Sam Anthony

The fast view

  • Companies are increasingly being held to account for their impacts on society and the environment, influencing their growth and profitability.
  • Investors need new tools to evaluate these impacts, or ‘externalities’, and hence identify opportunities and risks that the market may have mispriced.
  • The Sustainable Equity team has developed a Capitals Framework to assess a wide range of externalities. The framework is an intrinsic component of the investment processes of all the team’s sustainable strategies.
  • We assess different categories of externalities. This paper introduces the framework we use to do this and then focuses on how we analyse natural capital externalities.


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