What is integrated decision making?
Integrated decision making requires businesses and policymakers to assess the interdependencies across various capitals. Rather than viewing resources in isolation, this approach acknowledges that the depletion of one form of capital for financial gain ultimately destabilises long-term economic health. The report highlights the need for a systems-thinking approach, recognising that decisions impacting natural and social capitals have ripple effects. For instance, companies reliant on natural resources face growing pressures, as resource scarcity and regulatory changes increasingly affect supply chains, with investors and consumers demanding better environmental and social practices. Integrated decision making provides a framework to navigate these challenges, balancing trade-offs and recognising the value of all capitals in sustaining economic activities.
What innovation has to happen?
Three key innovations are outlined: (1) Capitals Protocol – a framework that guides businesses in identifying, assessing, and valuing impacts on all capitals; (2) Governance Framework for Valuation – a set of transparency and confidence guidelines that ensure accurate valuation and boost stakeholders’ trust; and (3) Requirements for Integrated Decision-Making – seven practical steps businesses can take to apply integrated thinking. These innovations are necessary to achieve a holistic perspective, with companies encouraged to incorporate tipping points, trade-offs, and dependencies into their decision processes. Research from the report suggests that, globally, front-running companies are beginning to implement these innovations, seeing benefits in risk management, stakeholder trust, and long-term viability.
What can you do?
The report calls on finance professionals to embrace the Capitals Coalition’s frameworks in practice. Specific actions include using the Capitals Protocol to incorporate systems-thinking, following transparency guidelines to improve valuation credibility, and adopting integrated decision-making requirements in business planning. Participating in public consultations is encouraged to refine these frameworks, with early adopters piloting them from 2025 onwards. Finance professionals can contribute by aligning their valuations and disclosures with these protocols, which aim to shift focus from short-term financial gains to sustained value across all capitals.