Author Archives: Petro Visage

Driving Sustainability in SMEs: A Conversation with PlasTrak Co-Founder Finn Howley

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Petro Visagé

As small and medium enterprises (SMEs) grapple with the growing demands of corporate sustainability reporting, PlasTrak, an innovative Irish startup, has carved out a niche by demystifying complex EU regulations. This initiative provides SMEs with tailored, easily digestible guidance to enhance their sustainability reporting practices. Deputy Editor Petro Visagé sat down with Finn Howley, co-founder of PlasTrak, to unpack the origins of this transformative tool, the challenges they faced and their impact on the Irish SME sector. 

Can you give a brief overview of what PlasTrak does. How does PlasTrak specifically address the needs and challenges of SMEs in becoming more sustainable?

Howley: The mission of PlasTrak is to guide Irish SMEs through the transition to full plastic waste reporting and measurement. SMEs, by 2028, will have to track a huge amount of data points in relation to their sustainability footprint under CSRD. While not directly in scope of the directive, SMEs will be affected by the upstream and downstream reporting requirements of corporations above them in the value chain. For instance, for Musgraves to be able to comply with the directive, they will need to provide data on things like packaging waste that goes out the front door of every retailer that they supply to. Thus, there is a massive challenge for SMEs to start developing the infrastructure to record and report on their sustainability impact. What we do is provide SMEs with their reporting requirements in simple and digestible terms, in stark contrast to a 200 page EU document that is full of legalistic and technical language. We know that time is the most valuable resource for small businesses, so our aim is to create value for them by saving them hours and hours spent understanding their requirements under CSRD. 

Could you tell us more about the origins of PlasTrak?

Howley: So, we started working together as a trio in October 2023 when our lecturer paired up Robert and I with Maïlé because of our similar research interests in our capstone. It’s a very practical capstone where the first semester is spent doing primary research on a challenge, and the second semester is all about implementing solutions to that challenge. We were all interested in the implications of the new CSRD legislation so when we went and carried out our research, our biggest finding was that Irish SMEs needed help in the transition to sustainability reporting. So, when it came to taking action in January this year, the PlasTrak Initiative for Irish SMEs was born based on that finding. 

Could you tell us more about the founders?

Howley: I’m from Balbriggan in North County Dublin, Robert’s from Ashbourne in County Meath and Maïlé’s from Bali, Indonesia. Robert and I have been close friends since we were 12 years old, having gone to the same secondary school and playing rugby together in CUS. We’re both studying BESS, while Maïlé is in Computer Science & Business. 

What inspired PlasTrak and how did your personal and professional experiences shape the company’s mission?

Howley: So we were inspired to start PlasTrak when we were nudged by an Audit Partner that we interviewed in one of the Big 4 firms to look into Europe’s new sustainability reporting regulation, the CSRD. He described it as the “biggest change in company reporting in 40 years”, and when we did look into it, we found it to be a really interesting opportunity. 

From a personal point of view, we’re all passionate about sustainability. Robert and I have been involved in our local tidy towns committees for a number of years and Maïlé was part of the Bali’s Big Clean Up while at school in Bali. We’ve also all done internships in financial services firms, and studied in financial reporting modules, so I think we all kind of had an interest in the technical side of sustainability reporting – the whole aim of the CSRD is to bring sustainability reporting up to the same level of credibility and usefulness as financial reporting.

In launching a sustainability-focused startup, what were some of the biggest challenges you faced, and how did you overcome them?

Howley: I think that growing the initiative at the beginning was challenging as people didn’t take us seriously, perhaps we were initially perceived as inexperienced university students attempting to tell business owners how to run their businesses. This might have been the viewpoint of the people we intended to work with but declined our help. We moved away from the identity of college students working on a project, which might carry connotations of temporariness and lack of practical experience. Instead, we positioned ourselves as informed experts in the field of CSRD, letting on that we could “walk the walk” and not just talk about it. This repositioning helped in building trust and respect in the business community.

How important are partnerships and collaborations to PlasTrak, and can you share examples of successful collaborations?

Howley: Partnerships played a huge role in our initiative, we couldn’t have done it without our industry, government and academic partners. We collaborated with businesses across the sectors of healthcare, agriculture, construction, clothing retail, and food and beverage. Collaborating with Honey Truffle was a really fun experience, Eimer (Chef and Owner) is so nice. She gave up a lot of time out of her day and provided us with a lot of helpful feedback. 

In terms of the government side, the initiative was supported by the Department of Enterprise, Trade and Employment. They invited us to Local Enterprise Office events where we were able to network. We met a really cool entrepreneur at one of the events who then became one of our SME website users. We also collaborated with TBS faculty to share our insights and to both give and receive feedback. 

What are some of the biggest challenges currently facing the sustainability sector, and how is PlasTrak addressing them? 

Howley: Well certainly the first things that come to mind are costs and regulation, which is exactly where our business model fits. There’s no doubt that most business owners welcome the idea of sustainability but the question is to what extent are they willing to implement sustainable processes within their businesses? Sustainability initiatives often require substantial upfront investment. For instance, transitioning to renewable energy sources, upgrading facilities to reduce emissions, or adopting advanced recycling technologies can be expensive initially. The financial return on investments in sustainability could take several years to realise and the long payback period can deter businesses who prioritise meeting short-term demands. 

I think the initial success of PlasTrak stems from us providing our service for free. Our toolkit was created out of passion for the SMEs that keep the Irish economy ticking. By removing the cost barriers, we make it feasible for even small to medium enterprises to adopt sustainability measures that they would otherwise deem too expensive. Additionally by educating both the business community and students about the long-term cost savings and brand enhancement benefits of sustainability we encourage investing in sustainable practices and being prepared for the regulatory changes down the road.

What are the lessons you learned through this experience and what advice would you give to entrepreneurs looking to start a sustainability-focused business? 

Howley: We’ve learned so much already but to boil it down to key points: 

  1. You’d be surprised how willing people are to help if you just take the first step and ask.
  2. Being a college student makes for a great opportunity to use the free time you have to help others who are time and resource constrained with their challenges. It’s also a great chance to bridge the gap between the theory you learn in the classroom and the real challenges like climate change that are taking place in the world. 
  3. Resilience is key – the more comfortable you are with rejection and setbacks early on the better. It was the setbacks in our initiative that allowed us to step back and rethink. Being resilient actually allowed us to expand the initiative in new ways as we stopped worrying so much about following our plan so precisely.

Insights from a Global Business LaidLaw Scholar: Olamide Obadina’s Journey and Advice

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Exploring financial support, transformative experiences, and insights for aspiring scholars.

Petro Visagé

Laidlaw is an unparalleled scholarship initiative financing both research and leadership development for undergraduates with a vision to shape them into global citizens and future leaders. Surpassing €7,000 in total, the financial support extends to additional funding for training sessions, travel grants, and project expenses. This immersive experience cultivates indispensable skills transferable to project management, leadership, communication, and teamwork. Guided by experienced academics, scholars embark on original research projects and partake in a distinctive ‘Leadership-in-Action’ experience. Moreover, integration into an esteemed international Scholar group provides not only a network of like minded students but also profile-raising opportunities, enriching the overall academic and professional  journey.

With the application deadline fast approaching, our TBR editors thought it fitting to interview Olamide Obadina, a current Global Business LaidLaw Scholar, to gain her insights, advice and experience with the programme to highlight its opportunities in the business sphere.

“Receiving the Laidlaw Scholarship truly empowered me to conduct research in an area I am genuinely passionate about. I focused my research on gender, racial, and cultural diversity in the C-suite. This is a topic that  affects so many women globally and will affect me personally as someone coming from a minority background.” Obadina continued to explain that the opportunity has enabled her to gain a broader perspective of the topic and to learn from some of the best in the industry. She was able to explore the challenges women of diverse backgrounds face and how they overcome them. The experience further empowered her to present a research project sharing her findings with others that may be experiencing the same thing she did.

Key Opportunities: 

The programme provides opportunities to further develop leadership skills including: 

  1. Training sessions: 

As part of the programme, scholars attend leadership development training sessions including an Ethical Leadership online workshop with scholars from the UK, Canada and USA. Sessions focus on crucial skills such as  project management, ethical conduct, communication, teamwork, resilience, and cultural awareness. Obadina highlighted the training’s value in enhancing her communication and presentation skills, with her cohort participating in engaging public speaking workshops led by an acting coach. 

  1. Networking 

Laidlaw offers the opportunity to join a global network of scholars through the programme’s dynamic online platform and impactful in-person workshops and conferences. The Laidlaw Global Conference particularly stood out to Obadina. The conference brings scholars across the globe together and features unique networking opportunities and panel discussions. It further provides a platform to interact with a diverse range of individuals, allowing for the sharing of research projects and ideas. This engagement creates a sense of community, which is especially important when undertaking independent project work.

  1. Leadership in action

In the second summer of the programme, scholars engage in a ‘Leadership in Action (LiA) Project’ to apply leadership skills to real world challenges. For the project, scholars have the opportunity to travel abroad and work to improve the lives of people in a community of interest. The project empowers scholars to take ownership of a project, stress-test their leadership skills, gain a deeper understanding of global citizenship through exposure to diverse cultures, and contribute to tangible positive change. This may involve applying their own research or collaborating with NGOs, non-profits, or social enterprises. According to Obadina, the projects vary a lot; some resemble internships within organisations, while others involve hands-on physical projects. Numerous projects are located in Central Africa, offering opportunities to contribute to community fairs and uplift communities in various ways. Similarly, there are diverse projects in South America, including Peru and Colombia, providing a range of options based on individual interests and learning goals. “And what I love about it is that everything is contributing to a better, contributing to a better society, which makes you feel so privileged to be a part of a project that’s actually  impactful,” Obadina explains. 

Applying: 

The initial application consists of an online application form, a proposal for a research project in Summer 1, a proposal for a Leadership-in-action experience in Summer 2, a Leadership statement video and finally, a letter of support from the proposed supervisor(s).

Thereafter, applicants undergo a formal interview. If successful, applicants must draft an 800 word proposal for the research to be done in summer 1 and the potential challenges they may face. 

Advice for applications:

  1. Finding a mentor: 

Obadina explains that finding a mentor/supervisor is one of the hardest obstacles. Her strategy was to make a list of potential mentors in the area. She listed all her lectures, all the subjects she had chosen, and then all the subjects that could relate to her research. Obadina then emailed each in turn explaining the project and research. Interestingly, she noted that many professors may be unfamiliar with LaidLaw, so be prepared to explain the programme’s aim. While Obadina successfully found her mentor with this strategy, she urges applicants that may be struggling to leverage LinkedIn; “I’m sure you have a connection and can connect you to someone who could be your mentor. Really leverage your personal network. I think that’s something that you should do every single year. I love that you’re actually doing that for Laidlaw, because personal connections have been so incredible in pushing my research.” 

  1. Choosing a topic

Obadina advises applicants to choose a topic they are genuinely passionate about. “When I did my interview, you could see how passionate I was. They know when you genuinely care about the project and that’s so important because that’s what’s going to motivate you to keep doing this independently over summer.” However, ensure that the research can have a significant impact. “There are a lot of topics you could research that you might be interested in, or they relate directly to your life, but  maybe  in terms of creating a research project, they don’t really transfer to everybody else,” Obadina continues. Thus, the key is striking a balance between personal interest and generalisable, relevant impact. 

  1. Drafting the application:

It is imperative to be clear and concise, Obadina explains: “Know exactly what is going to come out of your research. Be clear about the type of leadership and action projects you want to do in year two. Be clear about potential challenges that you might encounter. Be clear about what you want to gain from the space. That’s something they will really look for. As a person, what do you want to gain from this? What do you really care about?” 

Obadina’s experience:

For Obadina the experience has been beyond rewarding. When asked about her experience she emphasised two main highlights: the global exposure and the growth. 

Through the annual Laidlaw Global Conference, Obadina was able to find a community of passionate scholars from across the globe, each with their own fascinating research to share. The opportunity also empowered her to interview inspiring women in  reputable roles; from entrepreneurs to executives from Canada, the U.S., Malta, France, the U.K. and more.  

To Obadina the most rewarding part was how much she learned from the interview process. She loved hearing stories from people that were mistreated in the C-Suite and how they overcome their challenges in the workplace. The experience also gave her exposure to many different industries and how systematic barriers differ across sectors. She further noted significant personal growth through the experience, as in facing many setbacks throughout the process, Obadina learned to be flexible and adaptable in her approaches and to set realistic goals for progress. 

The experience further enabled Obadina to discover just how passionate she truly was about the topic. “I always knew I was interested in diversity and inclusion, but when you’re actually doing your research, you realise, wow, this is something that I really get here, something I’ll be able to pursue a career in, something that I could do my research in. It gave me a really good view of where I could take this long-term.” 

The deadline is 12:00 Noon, 12th February 2024! Be sure to apply!

Advice to successful candidates

“Approach it with an open mind. At this point, you’ve picked your topic, you’re probably really excited about what you want to do and you’re probably going to plan out everything and make preparations. I would say do that, it’s amazing, but also accept that it will not always work out that way. And that’s not  something negative. I actually see it as an opportunity to pivot. Being flexible and adaptable is going to help you when you solve problems in the future. Don’t overthink it, you’ll learn as you go.” 

– Olamide Obadina

Read more on the Laidlaw Scholarship here: https://www.tcd.ie/Careers/students/awards/laidlaw/ 

For more questions on the programme feel free to reach out to Olamide Obadina via LinkedIn: linkedin.com/in/olamideobadina

Aviation Sustainability: In Conversation with SFS Co-Founder Agnes Thornton

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Petro Visage

Introduction:

The aviation industry is responsible for 3% of the world’s carbon emissions – a footprint that could swell to a staggering 27% by 2050 if we were to continue business as usual. In its 77th Annual General Meeting in October 2021, the International Air Transport Association (IATA) passed a resolution for the global air transport industry to achieve net zero carbon emissions by 2050. It is, however, widely acknowledged within the sector that reaching this objective poses a substantial challenge. Balancing emissions reduction with the growing global demand for air travel in a post-COVID-19 era presents a delicate equilibrium to be struck.

TBR’s Deputy Editor, Petro Visage, sat down with Agnes Thornton, co-founder of Sustainable Flight Solutions (SFS) to explore potential opportunities for sustainable aviation in Ireland.

Sustainable Flight Solutions: Pioneering Sustainable Aviation

Founded by Agnes Thornton and Darren Carty, SFS is an innovative project development company focusing on the production of Sustainable Aviation Fuels (SAFs) in Ireland and abroad. SAFs are alternative fuels used in commercial aviation, capable of reducing CO2 emissions by up to 80%. SAFs can be sourced from various materials, including waste fats, oils, greases, municipal solid waste, agricultural residues, and non-food crops grown on marginal land. This newly developed fuel source is considered sustainable as they do not compete with food crops, require minimal additional resources like water or land, and do not contribute to environmental issues such as deforestation or biodiversity loss. Unlike fossil fuels that release sequestered carbon, SAFs recycle CO2 absorbed by their feedstock biomass during growth, reducing their overall carbon footprint.

The firm’s mission is rooted in a shared responsibility to drive the decarbonization of the aviation sector, both regionally in Ireland and on a global scale. By fostering collaborations with industry partners, academia, and technology providers, SFS is actively engaged in research and development efforts.

The Inspiration Behind SFS: A Journey to Sustainability

SFS was inspired by a shared vision for a more sustainable future in the aviation sector. Both Founders of SFS are airline pilots; during the COVID-19 pandemic, fewer working hours enabled the pair to embark on higher education, focusing their research on SAF Life Cycle Analysis and SAF implementation for industry through a post-graduate Diploma in Sustainable Systems Engineering and an MSc in Aviation Management, respectively. As the team expanded to include expertise in aircraft leasing and financing with the addition of Aidan Bodkin as third director, their collective vision for a more sustainable future for the aviation sector came into sharp focus.

Thornton and Carty understood that the aviation industry needed changing if it were to continue. “Sustainability is imperative for the industry to survive in the long run”, Thornton explains. Knowing this, a concerning observation was that while many studies were done on SAF here in Ireland, there was a gap between academia and industry, with significant interest by firms with minimal information. SFS Ireland then started to bring the needed conversations to the table, starting as an advocacy group to spread awareness on SAF and other sustainable practices. Soon, they hosted workshops with academics and stakeholders across supply chains to spark conversations around potential solutions.

Agnes explains that the road to making aviation more sustainable is long and tedious, but initial, encouraging steps have been taken in Europe and world-wide. SFS believes that Ireland has an important role to play in the development of SAFs and are therefore actively engaged in projects to facilitate the transition, from R&D to feasibility studies and policy discussions.

Feasibility Study with SkyNRG: A Significant Step Forward

One significant milestone in SFS’s journey was a comprehensive feasibility study carried out with SAF producer SkyNRG. This study, conducted in collaboration with industry giants Avolon, Orix Aviation, and Boeing, assessed the commercial viability of a Sustainable Aviation Fuel (SAF) production in Ireland.

The EU’s ReFuelEU initiative presently requires a phased elevation in the inclusion of SAF in aviation fuel at EU airports, commencing at 2% by 2025 and ultimately achieving 70% by 2050. Released last Wednesday, the report found that Ireland has the potential to establish a €2.55 billion annual sustainable aviation fuel (SAF) industry, generating over 1,000 highly skilled jobs by 2050 if it meets these targets.

The study, funded by industry leaders, marks a promising step towards reducing the aviation industry’s environmental footprint.
That being said, the report accentuates the necessity of executing well-structured policy modifications to enable the comprehensive growth of this industry. It advocates for business incentives, such as tax credits and guaranteed pricing, while emphasising research and development funding and planning process reform. Moreover, the report stresses the need for investment in storage and transport infrastructure, along with public-private collaboration. For an actualisation of a prosperous SAF sector in Ireland, industry players must collaborate in establishing and effectively enacting vital policies. In light of these recommendations, it is worth noting that Minister for Enterprise, Trade and Employment Simon Coveney underscored the government’s steadfast commitment to initiatives focused on emissions reduction in air travel when presenting the study last week.

Overcoming Barriers to Sustainability: The Road Ahead

When asked about the challenges in adopting sustainable practices in the industry, Thornton pointed out a variety of measures beyond just SAF, including improved operational procedures, enhanced air traffic management, and the use of fuel-efficient aircraft and engines. These measures are collectively needed to work towards industry-wide emissions reduction goals.

However, significant progress has been made with the recent ReFuelEU proposal, which mandates SAF use, thus providing a clear direction for the industry. This proposal mandates SAF use by putting an obligation on fuel suppliers to blend a certain percentage of SAF into their jet fuel supply, starting with 2% in 2025, and stepping up to reach 70% by 2050 as mentioned prior. A sub-mandate is also relevant to note, which ensures that part of the SAF is of non-biological origin, so called “synthetic fuels”. This agreement is a significant milestone, as it sets out the ambitious targets from the EU and gives more certainty and clarity to investors and SAF producers alike.

The primary hurdles in advancing sustainable aviation fuels (SAF), Thornton explains, include issues related to scalability, feedstock supply, and insufficient investment due to lingering uncertainties, as the implementation of EU policy requires national-level adoption. While the EU agreement marks an initial step, long-term certainty necessitates the establishment of a robust national policy.

To address these challenges, strategies under consideration involve the implementation of an EU SAF mandate and ongoing policy discussions. These discussions are showing promise in instilling confidence among investors, particularly those involved in capital-intensive SAF projects.

Regulatory Changes and Trends: Navigating a Greener Sky

In recent years, there has been significant regulatory changes pushing for sustainability within the aviation sector some of which include:

1. Renewable Energy Directive (RED III): On September 12, 2023, European Parliament members officially passed revisions to the Renewable Energy Directive (RED III), facilitating the adoption of renewable energy across EU member states.

2. ReFuelEU Aviation Initiative: on October 9, 2023, the EU Council approved the ReFuelEU Aviation initiative as a fundamental component of the ‘Fit for 55’ package, initially introduced by the European Commission on July 14, 2021. The primary objective of this package is to reduce greenhouse gas emissions by a minimum of 55% by 2030, ultimately achieving climate neutrality by 2050.

3. CORSIA Implementation: Commencing from 2027, the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) will be mandatory in most nations. Differing from the EU ETS, which sets emissions caps, CORSIA permits emissions to rise while mandating compensation through offsets. In 2022, the EU Parliament and European Council mutually agreed to integrate CORSIA into their emission monitoring framework and gradually phase out free aviation allowances by 2027. Ireland took an active step by embracing CORSIA regulations in 2021 during its initial stages.

However, Thornton emphasises the significance of the Climate Action Plan for 2024, expressing hope for a more comprehensive acknowledgment of aviation compared to previous initiatives. “Unfortunately, Ireland has been somewhat lacking in ambition in this regard, but we are encouraged by positive trends and anticipate the integration of Sustainable Aviation Fuels (SAF) in future climate and transportation discussions,” Thornton explains.

The Future of Sustainable Aviation: Collaboration and Consciousness

Thornton strongly believes that a more sustainable aviation industry is achievable. However, she emphasises that this goal can only be achieved through a collaborative and conscious approach by everyone involved. Stakeholders from all sectors need a clear understanding of the environmental impact of air travel, the opportunities presented by sustainable fuels, and the importance of policy support to aid the transition towards a sustainable future for the aviation industry. The future of sustainable aviation is promising but requires a collaborative and conscious effort to properly meet the state of the sector.

Fostering Sustainability in Aviation: Advice for All Stakeholders

Thornton emphasises the various avenues for bolstering a sustainable aviation sector. Some include conscientious travel, participation in Sustainable Aviation Fuel (SAF) procurement programs, and advancing awareness through education.

Businesses, in particular, can play a pivotal role by setting an example, educating their workforce about the environmental impact of air travel, and exploring pathways to minimise their emissions. Firms should explore corporate initiatives to procure SAF for their business travel needs, thereby stimulating SAF production through voluntary contributions.

National policymakers have been given a clear task by the recent ReFuelEU initiative: to demonstrate commitment to a future SAF industry, it is imperative that they swiftly and consistently implement the regulation on a national level.

While success stories from industry frontrunners such as the Lufthansa SAF program, the SAS SAF Program, the IAG SAF Roadmap, and the JetZero Council showcase the economic and competitive advantages achievable through sustainable aviation practices, Thornton cautions against the lurking threat of greenwashing. Maintaining robust governance and transparency remains essential to empower customers to make well-informed decisions regarding their individual contributions.

Read more about SFS initiatives at:

SFS Ireland

To learn more about SAF:

https://www.iata.org/en/iata-repository/pressroom/fact-sheets/fact-sheet—alternative-fuels/

Natural Capital Accounting: An Interview with Prof. Jane Stout

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“Natural Capital underpins all other capitals – it is fundamental to human life and society. Without it, we wouldn’t be here…’’

Natural Capital Accounting (‘NCA’) is a fascinating tool for risk evaluation that can potentially aid the fight against climate change. TBR correspondent, Petro Visage, recently spoke with Jane Stout, an ecologist and Professor in Botany at Trinity College Dublin to learn more about her work with NCA. Stout is Trinity’s Vice President for Biodiversity and Climate Action, where she works with the Provost to oversee the development, coordination and implementation of Trinity’s Sustainability strategy.

Background

In 2012, Stout invited Prof. Gretchen Daily to give a lecture on natural capital in Trinity. Prof. Daily worked with a small group to raise the profile of NCA in Ireland, chairing Ireland’s first conference on natural capital and co-founding the Irish Forum on Natural Capital in 2014. She oversaw the transition of the Forum to Natural Capital Ireland CLG in 2018, and chaired the Board of Directors until 2022. During this period, Prof. Stout organised a major Natural Capital conference in 2016, and co-convened the National Biodiversity Conference in 2019. She is the Principal Investigator for the first project to develop Natural Capital Accounting at catchment scale in Ireland (funded by the EPA), which is led by Trinity, in partnership with UCD, UL, UoG and NCI.

Natural Capital Accounting

What is natural capital accounting and why is it important?

NCA is a framework for systematising environmental information and the benefits we derive from nature. The information is then linked to economic accounting systems. Firms can benefit as it makes otherwise invisible impacts and dependencies on nature salient on the balance sheet. NCA can help businesses identify risk and to track change over time. 

Examples of firms that benefit from ecosystem services

All companies, regardless of sector, have impacts and dependencies on nature, but these are often indirect and unrecognised. It is easy to see how primary industries rely on ‘free’ services from nature. For example, agricultural production needs healthy soils, pollination, and climate stability – all of which are supplied by nature. However, secondary and tertiary industries also rely on nature for the products they process, use or sell. For example, a beautician may use a product that contains shea butter, which comes from shea fruits from trees that grow in the parkland of West Africa, which need insect pollinators to visit flowers in order to produce fruit. In the past, the role of nature in providing these ‘free’ services such as soil structure and functioning, carbon sequestration and climate regulation, nutrient cycling, natural pest control and pollination, was excluded from economic models. Instead, practices that damaged the delivery of those services were considered ‘externalities’ – an indirect cost to society. NCA allows the full costs and benefits of business, not just in financial terms, but in biophysical terms as well, to be quantified and tracked over time.

How exactly does it tackle climate change?

While NCA does not directly tackle climate change, it allows nations and companies to determine the impact of their activities on carbon sequestration and storage and to modify their approaches as a result. It thus informs sustainable strategies. 

Natural capital is one of the 6 capital types of the integrative reporting framework (IRF) – could you elaborate on how natural capital affects other capitals?

Natural Capital underpins all other capitals – it is fundamental to human life and society. Without it, we would not be here. We would have no primary industry; nothing to eat, build with, trade or sell. The economy is bound by the environment, not separate from it, and infinite growth is not possible on a finite planet. In the past decades, whilst other capitals have grown, natural capital has shrunk. If the stock of natural capital (consider it as an asset) shrinks, then the flow of goods and services we derive from it also declines. 

Most students walk out of accounting and finance modules with no knowledge of integrative reporting frameworks or natural capital. Do you believe such classes to be outdated ? 

Yes – in the future, understanding all forms of capital is going to be crucial. Human populations are continuing to grow, increasing demand for resources more rapidly than they can be supplied by nature. Even biologically renewable resources need time and space to renew. We are reaching tipping points in some of the world’s biggest ecosystems, and this will have consequences for society and economies worldwide. For example, deforestation of the Amazon rainforest and global climate change has changed local weather systems in the Amazon basin, drying the soils and causing trees to die. In a few years, rainforest can turn into grassy scrub permanently- the implications of this happening are far reaching, affecting not only local agricultural production, national socio-economic stability, and global food markets, but also global weather systems, wildlife, and society. 

Looking forward

Stout suggests that the biggest challenge for firms looking to adopt NCA is the lack of immediate financial returns. However, decisions should not be based purely on financial cost-benefit analysis. The risks associated with such a narrow approach are massive. In the past, it has rendered several  issues, inter alia,  climate change, biodiversity loss, pollution, freshwater depletion, and ocean acidification.  It is essential to include the costs and benefits of nature.

With more firms realising this crucial fact, NCA may soon disrupt the status quo of reporting. However, for NCA to make a true impact, more firms need to adopt it rapidly and use it to guide balanced, more sustainable decision-making. 

See www.naturalcapitalireland.com www.incaseproject.com and www.for-es.ie for more.