Natural Capital Monetization UN Case Study in India - Swiss Owned Cement Company

The swiss based Holcim Group owns the Ambuja cement company , the third largest cement producer in India. Ambuja conducted a piolet/case study through the UN Natural Capital Accounting and Valuation of Ecosystem Services (NCAVES) project within the larger new standard for ** national environmental accounting** SEEA EA (SYSTEM OF ENVIRONMENTAL ECONOMIC ACCOUNTING) developed by the UN Statistics Davison.

The basic premise is to define what is a ‘positive’ or ‘negative’ externality and monetize both aspects.

"Examples of Ambuja’s positive externalities include:
• Harvesting more water than it uses in its manufacturing (‘Water Positive’), through check dams,farm ponds, ground water recharge structures, river linking, and turning former quarries into manmade lakes or wetlands, promoting water efficient irrigation methods like micro irrigation
among farmers.
• Using waste from other industries in its manufacturing process, avoiding the need for landfill
• Supporting income-generating activities for members of the local community

Examples of Ambuja’s negative externalities include:
• Emissions of greenhouse gases
• Other emissions, such as fine particles
• Extracting surface or groundwater

Water scarcity was a big part of the report

In order to determine the cost of water use, Ambuja first records water use across its sites. It then applies the WRI’s Aqueduct software to determine plant-wise scarcity percentage levels. Using those scarcity levels, it correlates the social cost of water using an analysis undertaken by TruCost, an environmental data and research agency. Finally, the company multiplies the water use figures (per site) with the social cost of water use. The true value calculation shows the value erosion through water use. To calculate the positive value generated by its water harvesting investments, Ambuja uses the same methodology. It multiplies ‘water credits’ earned per site by the social cost of water in the region


I get that that paragraph alone is difficult to understand by itself. The important point is how the paradigm of natural capital and ecosystem services leads you to a place where your creating ‘water credits’ and tokenize the environment.

That company TruCost is now integrated in the S&P 500 global intelligence platform.

Trucost’s environmental and climate data represents 99% of the global market capitalization, and includes greenhouse emissions (scopes 1, 2 and 3), water, waste, pollution and natural resources data. The user- friendly interface of Market Intelligence platform also provides latest ESG News and Research, Sector Profiles, Portfolio Analytics and Company Briefings.”

picture for Jason


Another revealing part about this is the “positive externality” of taking more water than is needed. So many farmers often struggle with water shortages.

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