Is the time right for integrated natural-built asset management?

Introduction

The built and natural environments are complex and economic activity fundamentally depends on natural capital or assets. The global ecosystem or natural-built environment is so complex that linear, conventional, and narrowly focused approaches struggle to accurately frame the pertinent issues, much less identify the causal factors and solutions. Laws, regulations, and practices have made efforts to do this throughout human history, some successful and some not. Moreover, indigenous peoples have done a far better job of managing and living within their natural environment than so-called modern humans. How we as humans came to devalue nature, or hold it in primacy, is anything but simple.

Asset management is an evolving, evidence and performance-based process and discipline that has developed in recent decades, a paradigm shift away from building and operating to managing assets for the longer term. In physical asset management, this serves to extend, and sustain, the asset life rather than simply focusing on the short-term: saving money, use of limited resources, getting the greatest return on investment, and so on, all of which have importance. It is among the best traditional features of continuous improvement in the human-built environment (Figure 1). 

Figure 1. An idealized, generic asset management system adapted from Overview of an Asset Management Framework

In recent years, natural asset management has begun to evolve to improve and sustain nature. Integrating these two methodologies into a natural-built asset management process could be a means to a healthy global ecosystem, of which our human society is a part and not separate, achieving the 17 United Nations Strategic Development Goals (SDG). This will be assisted greatly by inventorying the world's natural assets even as biodiversity decreases and extinctions increase, a monumental undertaking to be sure. These inventories have been initiated, more so on public lands.

The purpose of this article is to propose a methodology to better manage natural-built assets. Much of the process has already been developed but is largely fragmented through laws, policies, regulations, science, engineering, and other disciplines. This integrated tool could then be used within frameworks such as Doughnut Economics and others to help create a healthy planet and economy for all.

Background

In this article, natural-built asset management refers to the practice of integrating and managing both natural assets (such as ecosystems, green spaces, and water bodies) and produced assets (such as infrastructure, facilities, and vehicle fleets) within a comprehensive framework. It involves recognizing the value and benefits that natural assets provide and incorporating them into decision-making processes alongside built assets to maximize the benefits to both with primacy to regeneration of the natural ecosystem (Table 1). While sustainability balances, and has neutralized many of the losses to nature, regeneration is emerging as what’s needed for nature to return to primacy. 

Table 1. Regenerative development in integrated natural-built asset management

Source: ProTech For Good

Other categories of assets and their management vary and include financial, human well-being, community, and others that have been excluded for the purposes of this article but could and should be integrated. There are also other assets that are poorly understood and should be better managed such as groundwater pumping and its contribution to sea level rise. As stated earlier, the natural and built environments are complex.

Governments and businesses are failing to adequately measure, record, and account for natural capital, social justice, and other critical areas in their budgets. Progressive stakeholders around the world have started to take action towards a net-zero, nature-positive economy that contributes to building more equitable and resilient societies. This requires recognizing and accounting for our impact and dependence on natural assets and services. Initiatives such as the Task Force for Nature-related Financial Disclosures (TNFD) and Natural Capital Protocol are helping to better engage governments and businesses.

Wealth of the planet

To mobilize people around accomplishing goals, they need to be simple, focused, and relatively small in number to be easily comprehended. Although everything important cannot be measured, it is essential to have simple and measurable metrics to aid in meeting goals. As such, the Inclusive Wealth (IW) categories of natural, human, and produced assets, are moving us toward this end.

Inclusive wealth is a measure designed to address whether society is on a sustainable development trajectory. Inclusive wealth is defined as the aggregate value of all forms of capital. It is quite difficult to measure. By the end of 2021 the estimate of global wealth was $463.6 trillion, the net worth or “wealth” defined as the value of assets owned by households minus debts. This is the relatively easily measured economic construct within which we humans live, excluding natural capital which is decreasing, and this natural capital may continue to decrease. A 2015 estimate of the value of nature services was $125 trillion (reduced from $145 trillion compared to a $33 trillion estimate in 1997 due to damages to nature). By comparison, ecosystem services are estimated to be worth nearly twice as much as the world’s US$75 trillion gross domestic product in 2015. While the value of global nature and global gross domestic product vary, the point is that the estimated value of nature that supports us is worth a lot, including in traditional economic terms.

Since money is a human invention, as is the economy, and is integrated deeply into our human society, there is an argument to segue this invention into natural-built asset management. The value of nature is evolving and increasingly recognized. The value of the human-built infrastructure is generally well established.

There is potential for a win for the economy, nature/climate, and humans if the public and private sectors can act to protect and restore nature and identify, assess, mitigate, and disclose nature-related risks to avoid potentially severe consequences and accelerate along the path to a thriving healthy global ecosystem. Doing this within an asset management methodology can move this forward.

So, how would this work?

In the simplest terms, the process (Figure 1) involves an inventory of assets, an assessment of the condition, estimated value, estimated life of the asset, whether it needs to be repaired or replaced, the optimal action and cost, a priority list based on criteria, and programming with the money available for the highest priority needs. Although money has usually been the measure of value in asset management, measurements can also be reflected through ranges of numbers, letters, or some other metric. Regardless of the metrics used, they should be common for both natural and built assets.

A natural-built asset management approach recognizes that natural assets provide various and valuable ecosystem services, such as stormwater management, air purification, carbon sequestration, and biodiversity preservation. By considering these natural assets alongside built assets, organizations and communities can enhance sustainability, regeneration, and overall quality of life on Earth. This will require multidisciplinary teams, and likely teams of teams, across the spectrum of natural and built disciplines to include history, both earth and human. Developing the methodology will take time, inputs and outputs need to be simple and organized around a small and discreet number of measurable goals such as the 17 United Nations Strategic Development Goals to mobilize people. It is also important to point out that everything that is important cannot be measured, or at least not easily.

Built-natural asset management strategies may include incorporating green infrastructure into urban planning, preserving or restoring natural habitats, promoting sustainable construction practices, adopting policies that prioritize the protection and utilization of natural assets, and a host of other areas.

By embracing natural-built asset management, organizations can achieve a more holistic and sustainable approach to development and resource management, balancing human-made structures with the valuable contributions of nature and regenerating a vibrant healthy global ecosystem.

It should be pointed out that myriad efforts continue to be developed and put forth to regenerate a healthy planet, including ESG (environment, social, and governance), sustainability, regeneration, models, research, engineering, governmental, academics, businesses, associations/societies, and non-profit initiatives. The key is collaboration, rolling up progress across the globe with decentralized execution to local areas, vice fragmented, siloed and centralized efforts, for the greater good.

Our global environment is one system. Artificially separating it into separate systems or categories is based solely on the purpose of the study, discussion, or writing. As such, artificial intelligence can be an enormously important tool in better assessing and understanding the vast data, interactions, and dynamics in our global ecosystem. Thus, this could help inform better planning, decision-making, and execution but it is not a substitute. A significant word of caution, while AI is a tool, the path forward requires “listening” to Mother Nature. Humans have created our global ecosystem issues, and we must now be wiser to solve them. 

Conclusion

As Donella Meadows stated: “there are no separate systems”. Thus, asset management could be applied to the entire global environment, natural and built alike, as a portfolio of global assets. Since ecosystem services underlie the functioning of our entire global economy and human society, there is an argument to better integrate natural and built asset management. This could result in a valuable tool for a vibrant and healthy global ecosystem, natural and built.

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