"A livelihood comprises the capabilities, assets (both material and social resources) and activities required for a means of living. A livelihood is sustainable when it can cope with and recover from stresses and shocks, maintain or enhance its capabilities and assets, while not undermining the natural resource base.
The definition adopts an economics metaphor (capital assets) to describe the basic material and social, intangible and tangible assets that people have in their possession. These resources are the 'capital' bases from which livelihoods can be constructed and are defined as follows:
Natural capital - natural resource stocks (soil, water, air, genetic resources etc) and environmental services (hydrological cycle, pollution sinks etc) from which resource flows and services useful for livelihoods are derived
Economic or financial capital, including infrastructure - the capital base (cash, credit/debit, savings etc), infrastructure, and other economic assets that are essential for the pursuit of any livelihood strategy
Human capital - skills, knowledge, ability to work and good health important for the successful pursuit of livelihood strategies
Social capital - the social resources (networks, social relations, associations etc) upon which people draw when pursuing different strategies
Whilst more 'capital' sources could be identified, the main point was that in order to construct livelihoods, people should successfully combine all or some of these 'capital' endowments. Understanding, in the context of people's lives, how different livelihood resources are combined in the pursuit of different livelihood strategies is therefore, critical."
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