For those studying and learning Real Capital (Multi-Capital) and its application to producing bases for decision-making, this glossary may be of help.
| Allocation: How resources are distributed, considering equity and efficiency. It is a process that can be used to explore how to share access to a limited resource. |
| Asset-Liability-Equity (ALE) Framework: A method that tracks the use of different types of capital, identifying shortcomings, and informing policy development. It presents data in a clear format for decision-makers, often using tables or charts |
| Best Available Technology (BAT): Refers to the most advanced and effective technologies available for a particular industry or process, especially in terms of environmental performance and resource efficiency. It can serve as a benchmark for assessing the capability and performance of existing infrastructure. |
| Biological Real Capital: A common-pool resource that is used to harvest resources or as a recipient. Examples include forests or other ecosystems. |
| Built Capital: All man-made things used to provide basic needs, including infrastructure such as houses, roads, factories, tools, and systems like telecoms and payments. |
| Built Capital: The physical infrastructure, such as machines, tools, buildings, and other equipment, that are used in supply chains- It is a form of real capital |
| Circular Doughnut: A framework that visualizes a social floor and ecological ceiling within which a circular economy should operate. It is a concept developed by economist Kate Raworth . |
| Circular Economy: An economy where materials are reused and recycled, minimizing waste and promoting resource efficiency 0- It involves firms investing in infrastructure that allows for the use of renewable energy, recycled materials, and recyclable waste , |
| Commons: Also known as common-pool resources, these are essential elements like air, sunlight, and surface water that are available to everyone , Natural capital is a kind of commons |
| Digital Dashboard: A tool to provide an overview of how the built environment performs, using available digitalized data |
| Ecological Maturity: The maturity of biological real capital, defined by Odum et al. , It is measured by detritus recycling or phosphorus leakage – |
| Economic Maturity: A concept that focuses on the capacity and performance of infrastructure to meet societal needs, rather than on continuous economic growth ,, It is often associated with a focus on built capital , |
| Efficiency: The amount of resources used relative to the population served, or the functions of real capital relative to the population served , |
| Environmental Insolvency: When a company cannot afford to repair damage to ecosystems caused by its operations. |
| Equity: Fairness in the distribution of resources, considering the proportion of the population served. |
| Extraction Surcharge: A financial levy imposed on the extraction of natural resources, designed to reflect the true cost of resource use and to incentivize more sustainable practices. Revenues from the surcharge could be paid back to citizens as a dividend. |
| Human Capital: The health, strength, knowledge, insights, attitudes, and capabilities of humans , |
| Indicators: Metrics used to track trends and assess the performance of the built environment and its impact on society and the environment , They can measure factors like access to green spaces, housing quality and resilience to climate change , |
| Linear Economy: A traditional economic model based on a “take-make-dispose” approach where resources are extracted, used to produce goods, and then discarded as waste. This model contrasts with the circular economy. |
| Materiality: The relevance or significance of the actions of firms or organizations on real capital , 0, Also refers to the impact of omitting information on a reasonable user’s decision-making , |
| Maturity: What happens after growth. A stage when real capital can provide the services needed by the population it intends to serve. Mature real capital is developed to a stage that is sufficient to provide for the population . z, The maturity of real capital can be measured, and this measurement can inform policy. |
| Multi-Capital Approach: A method of measuring impacts across multiple categories of capital, including human, social, built, and natural capital, to assess the full value of goods and services in a circular economy. |
| Natural Capital: The living layer we rely on, including the lithosphere, minerals, and natural systems like the climate and water cycle , It can be divided into the biosphere and materials from the lithosphere , |
| Normative Approach: Expresses how something should be, aligned with democratically arrived at standards. Used to determine maturity levels based on values and desired outcomes. |
| Real Capital: Assets that are used in the production process but not used up in the way that a resource is. This includes natural, built, human, and social capital. |
| Regenerative Economy: An economy that operates to regenerate capital to maturity, ensuring services are sufficient for current and future needs , |
| Social Capital: The organisations and institutions that make up a supply chain, including the firms, communities, and regulatory bodies , ,, 0, ,, |
| Sufficiency: sufficiency means operating within ecological and ethical limits by asking “How much is enough?”. resources and services are not only available but also of high quality, equitably distributed, and able to meet the needs of the present and future populations, which is what defines the maturity of the real capital. |
| Superorganism: A concept that views the global economy as an interconnected system similar to a living organism, where different industries and sectors work together. Supply chains are seen as one of the workings of this superorganism. |
| System Dynamics modeling: A methodology used to map the flows of materials and energy within a supply chain, as well as to model the ‘status’ of different forms of capital. It is used to identify discrepancies between current and ideal levels, and to test policy interventions . |
| Systems Thinking: A structured approach to understand the stocks and flows of materials, allowing for mapping, modeling and testing scenarios |
Stephen Hinton Consulting 