A major challenge facing the sustainability movement is how to account for corporations’ positive and negative externalities — that is, the impact companies have on the wider world that doesn’t show up in traditional financial accounting. For business leaders, understanding these impacts is crucial as stakeholders, including investors, consumers, and regulators, increasingly demand transparency and accountability regarding a company’s larger footprint. When it comes to environmental sustainability, particularly, the need to measure and value nature accurately is becoming integral to strategic decision making, risk management, and long-term planning.
Q&A: To Protect the Natural World, We Need to Put a Price on It
NOAA’s chief scientist explains how new technologies can help businesses understand their impact, create new financial instruments, and enhance risk management.
August 22, 2024
Yaroslav Danylchenko/Stocksy
Summary.
Sarah Kapnick, chief scientist at NOAA, tells HBR how the agency is developing scientific standards and low-cost technologies to measure and value natural ecosystems. Kapnick highlights the critical role of accurate environmental measurement in aiding businesses to understand their impacts, create new financial instruments, and enhance risk management. She discusses NOAA’s efforts to bridge the gap between scientific research and practical applications, the importance of international cooperation, and the growing involvement of the private sector in environmental monitoring.