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Natural Capital

5 minutes 5 Questions

Natural Capital is the world's stock of natural assets which include geology, soil, air, water and all living organisms. Some of these natural assets provide people with free goods and services, often called ecosystem services, which underpin our economy and society. In the context of project management, it involves incorporating the value of these natural resources into decision making. By fully understanding the value that environment provides, project managers can make more informed decisions that reflect the true costs and benefits associated with the project including its potential impacts on the natural capital.

Natural Capital: An Essential Study Guide

Natural Capital is a critical aspect of environmental management, greatly emphasized in PMBOK Guide Seventh Edition.
What is Natural Capital? Natural Capital is the world's stocks of natural assets which include geology, soil, air, water and all living things. These assets provide people with a range of goods and services often referred to as ecosystem services, which make human life possible.
Why is it Important? It's crucial because it forms the basis for all human economic activity. The more we degrade or deplete our natural capital, the less resource we have available for sustainable economic activity in the future.
How does it work? It works by providing resources and services like raw material for production and absorption of waste from human economic activities.
Exam Tips: Answering Questions on Natural Capital

  • Understand the key concept: the natural assets and their role in economic activities.
  • Review the cost of depleting natural capital and the importance of sustainable development.
  • Prepare for questions involving the management and conservation of natural capital in project management.

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PMP - Environmental Management Example Questions

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Question 1

In a project focused on the sustainable use of Natural Capital, the team brainstormed various solutions to reduce environmental impact. The team proposed using recycled materials in construction to minimize resource depletion. What is the best course of action to effectively manage Natural Capital in this scenario?

Correct Answer: Implementing a comprehensive life cycle assessment to evaluate the environmental impact of material choices.

The best course of action is to implement a comprehensive life cycle assessment to evaluate the environmental impact of material choices. This approach takes a holistic view of the materials used, considering their sourcing, production, use, and end-of-life disposal. By conducting a thorough assessment, the team can identify materials that minimize resource depletion and reduce the overall environmental footprint of the project. The other options are less effective because they focus on short-term considerations or fail to analyze the sustainability credentials of the materials. Conducting a one-time assessment without considering long-term effects, opting for cheaper materials without evaluating their sustainability, or prioritizing short-term cost savings over environmental impact would not effectively manage Natural Capital in the long run. A comprehensive life cycle assessment is the most prudent approach to ensure the sustainable use of resources and minimize the project's environmental impact.

Question 2

You are managing a construction project that involves deep surface excavation. During the planning stage, your team estimates that there is potential for disturbing natural soil profiles and destabilizing the ecosystem. What should you do as a leader in line with consideration for Natural Capital?

Correct Answer: Reevaluate the project to discourage deep excavation, redesign construction techniques to minimize disruption, and possibly substitute with non-invasive construction approaches.

The best answer is to reevaluate the project to discourage deep excavation, redesign construction techniques to minimize disruption, and possibly substitute with non-invasive construction approaches. As a leader, it is important to consider the potential environmental impact of the project and take proactive measures to minimize harm to the ecosystem and natural soil profiles. Redesigning the project and using alternative construction methods that are less invasive demonstrates a commitment to preserving natural capital. Simply beginning construction and dealing with changes as they occur fails to address the potential environmental consequences upfront. Continuing with the planned project while only reporting the risk does not actively mitigate the issue. Dismissing the possibility of significant impact without thorough analysis is irresponsible from a sustainability perspective.

Question 3

You are supervising a highway project. A survey report shows a negative impact on the local bird population if construction proceeds as planned. What measures should you take in terms of Natural Capital?

Correct Answer: Change the project plan to avoid or minimize impact on birds, or integrate mitigation plans after consulting with an environmental specialist

The best response to the survey report in the context of Natural Capital is to 'Change the project plan to avoid or minimize impact on birds, or integrate mitigation plans after consulting with an environmental specialist'. The reasoning behind this choice of action is essentially due to the concept of Natural Capital. Natural Capital is the world's stock of natural resources, which includes geology, soil, air, water and all living organisms. In a project management context, this means trying to minimize the negative impact on the environment. The other answers are not considered best practices in terms of Natural Capital. 'Continue with the original plan ignoring the survey report': Ignoring the survey report and proceeding with the original plan shows a disregard for Natural Capital and the local bird population. 'Wait for the bird migration season to end before continuing the project': This option may seem like a possible choice, yet it would only temporarily solve the problem as the bird population would likely return next migration season. 'Try to relocate the bird population': This option is not feasible as it may disrupt the natural behavior and habitat of the birds, potentially causing more harm than good.

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