No? Then let me tell you why you might want to consider it.
Take the open seas, for example. No one is paying for the use of the oceans to ship goods or fish. That includes you. Great, you might think, that reduces the cost of my goods either for personal use or to produce something with those goods.
However, even though no one is charged for the use of the open seas, it is still costing humanity in loss of biodiversity and pollution.
In simple terms, individuals’ net worth statements or company or government balance sheets include assets and liabilities, whereby assets represent resources one controls. However, only produced capital (i.e., homes, cars, machines) and human capital (as in education and health) are included in our balance sheets.
Governments measure economic activity with the gross domestic product (GDP). What is missing is nature as an asset. We seem to get something for free, but in reality, even though we are not charged for the use of air and oceans, we are depreciating nature by the sheer use of it.
You might think that’s not your problem or there is nothing you can do about it. Except you and the rest of us are trashing earth as if we had an extra one laying around. A 2019 University of Cambridge Professor, Partha Dasgupta, in his United Kingdom Government commissioned report about the economics of biodiversity, states that we would need 1.6 earths to be able to continue with our activities as we are. We might have taken a bit of a pause during the COVID pandemic, but we are right back at those numbers. In addition, we are plagued by persistent inflation, which institutions around the world are trying to bring down.
In real terms, every good and service we are enjoying today should cost a multiple of what we are paying. I am not an economist, so I can’t calculate how much air travel should really be if we factored the cost of pollution into the ticket price. Or how much the fish that is ending up on your plate should be. Or how much a dozen eggs really cost. Or a gallon of milk that is produced by a cow which also produces methane.
Here is an attempt at making this more real on a personal leadership level:
1) Be an asset manager and include nature on your balance sheet/net worth statement
I literally have a line item on my net worth statement called ‘Nature’ (it includes air, water, biodiversity, living plants and animals).
A) Take inventory of your natural assets (even if you don’t own land, include the air that you breathe and the water you drink, both essential for life, and maybe access to parks or waterfronts where applicable that improve your quality of life).
Example: I live within walking distance of the Monterey Marine Sanctuary. Thankfully it is a sanctuary and therefore safe from oil spills. But I would be devastated if it became polluted and the biodiversity lost.
B) Value natural assets using expert data and comparisons if available to assess extrinsic values as best as possible. Assign intrinsic values based on how much nature around you means to you and your quality of life.
Example: What might it cost to replace trees? What would it cost to install special air filters that allow you to breathe, even if wildfires close by pollute the air and you can’t go outside? You will most likely undervalue nature as an asset, just because we can’t even comprehend how devastating it would be to lose it. So, be generous but try to be as realistic as you can.
C) Assess various risks:
• manmade (war, pollution, nuclear explosion, fires, hazardous materials exposure, explosions, transportation accidents) and
• natural (earthquakes, volcanoes, atmospheric rivers, hurricanes and windstorms, floods, fires, drought)
Example: Just recently I was caught off guard when I discovered that a sewage line above my property got stopped up and the county had to do major hazard clean-up to revert the pollution. What is the probability of a flood on your property? Or fire or drought? Living in California, we have gotten used to factoring those risks into everyday life.
2) Manage your natural capital, production capital and human capital sustainably
A) By restricting your own quantity of consumption and/or
B) By personally mentally inflating the cost of any purchase by at least 100 percent to compensate for the actual cost of nature, goods and services
3) Diversify your portfolio
Prudent investment strategies include diversification. So, consider including increased biodiversity into your portfolio, such as planting native plants, adding cisterns or rainwater-catching devices, becoming a beekeeper or protecting old tree groves.
Relationship building, a sustainable mindset and systemic thinking
To solve many of our current problems requires building a relationship with nature that is more mindful and heartfelt than we might have considered in the past 70-plus years. It requires a mindset shift from what we have always done to rethinking how we could do things differently.
Let this article be an inspiration to implement different thinking into your own self leadership. And once you have taken action on it for your personal footprint on earth, maybe you can move on and guide and lead others in rethinking and acting with nature in mind. We and our descendants will all thank you for it.
To further your understanding of this topic you might want to check out this book, Pricing the Priceless, The Financial Transformation to Value the Planet, Solve the Climate Crisis, and Protect our Most Precious Assets by Paula DiPerna