Natural capital and Near risk-free rates: Difference between pages

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imported>Doug Williamson
(Create page. Source: ACT Briefing Note, Transition to Risk Free Rate Benchmarks, October 2018.)
 
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Natural Capital can be defined as the world’s stocks of natural assets which include geology, soil, air, water and all living things.  
''Interest rate benchmarks''.


(RFR).
Examples include global forests and their role in controlling greenhouse gases, insects as pollinators, water resources and the ecosystems of the planet.


Just as companies need financial capital to support their business so too does the world need natural capital to support human life.
In the context of interest rate benchmarks, 'near risk-free rates' include SOFR (the Secured Overnight Financing Rate) and SONIA.


Poor management can result in depletion of financial capital and likewise natural capital needs to be managed and valued.
The Financial Stability Board (FSB) recommended in 2014 that stakeholders should identify near risk-free rates that might be used as alternatives to LIBOR.


Putting an economic value on natural capital and accounting for its use or renewal are behind the concepts of sustainability accounting or integrated accounting.


They are also known more simply as risk-free rates, although strictly they are not entirely risk-free.


Natural capital is also known as natural resources.


====Capital asset pricing model====


==See also==
RFRs should not be confused with the theoretically risk free rate of investment return, used in the Capital asset pricing model.
* [[BS 8632]]
* [[Capital]]
* [[Ecosystem services]]
* [[Environmental concerns]]
* [[Environmental profit and loss]]
* [[Human capital]]
* [[Intellectual capital]]
* [[Manufactured capital]]
* [[Natural Capital Coalition]]
* [[Natural Capital Committee]]
* [[Natural Capital Protocol]]
* [[Relationship capital]]
* [[Social capital]]
* [[Sustainability]]
* [[Sustainability bond]]
* [[SHE]]
* [[System of Environmental-Economic Accounting]]
* [[World Forum on Natural Capital]]




===Other links===
== See also ==
[https://naturalcapitalforum.com/news/article/sustainability-jargon-buster--10-essential-terms-for-ceos Sustainability jargon buster] www.naturalcapitalforum.com
* [[Benchmark]]
* [[Capital asset pricing model]]
* [[Credit spread ]]
* [[Financial Stability Board]]
* [[Gilts]]
* [[Interest rate risk]]
* [[LIBOR]]
* [[Risk-free rate of return]]
* [[SOFR]]
* [[SONIA]]


[[Category:Ethics]]
[[Category:Financial_products_and_markets]]

Revision as of 18:37, 1 December 2018

Interest rate benchmarks.

(RFR).

In the context of interest rate benchmarks, 'near risk-free rates' include SOFR (the Secured Overnight Financing Rate) and SONIA.

The Financial Stability Board (FSB) recommended in 2014 that stakeholders should identify near risk-free rates that might be used as alternatives to LIBOR.


They are also known more simply as risk-free rates, although strictly they are not entirely risk-free.


Capital asset pricing model

RFRs should not be confused with the theoretically risk free rate of investment return, used in the Capital asset pricing model.


See also

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