What’s it about in short: New paper join­ing bio­di­ver­sity off­sets and nat­ural capital

When was it released: July 8, 2016

By whom: Joël Houdet, Fabien Quétier, Helen Ding

More info: http://naturalcapitalcoalition.org/net-impact-accounting-for-renewable-natural-capital-possible-pathways-for-corporate-level-disclosure/

Short extract:

Both inter­nal and exter­nal stake­hold­ers of organ­i­sa­tions are increas­ingly aware of the impor­tance of nat­ural cap­i­tal in cre­at­ing sus­tain­able value. Cor­po­rate report­ing and dis­clo­sure on renew­able nat­ural cap­i­tal has been grow­ing over the past decade. It typ­i­cally fol­lows guide­lines devel­oped by the Global Report­ing Ini­tia­tive and the Car­bon Dis­clo­sure Project. Yet, quan­ti­fied data dis­closed is cur­rently essen­tially lim­ited to annual air emis­sions and water con­sump­tion, while impacts and depen­den­cies on bio­di­ver­sity and ecosys­tem ser­vices are addressed by dis­clo­sure of man­age­ment approaches to iden­ti­fied mate­r­ial issues, with­out quan­ti­fied per­for­mance data pre­sented in a con­sis­tent, stan­dard­ised man­ner. This pre­vents stake­hold­ers from fully under­stand­ing how report­ing organ­i­sa­tions man­age their net impacts and depen­den­cies on renew­able nat­ural cap­i­tal. This paper thus aims to timely respond to the needs of devel­op­ing meth­ods that are robust and con­sis­tent for improv­ing cur­rent nat­ural cap­i­tal report­ing and disclosure.

More specif­i­cally, the paper:

• Briefly reviews busi­ness impacts and depen­den­cies on nat­ural cap­i­tal, high­light­ing why net changes in nat­ural cap­i­tal matter;
• Reviews exist­ing cor­po­rate report­ing and dis­clo­sure approaches, high­light­ing the gaps towards net impacts dis­clo­sure (e.g. no account­ing for nat­ural cap­i­tal stocks, no clear base­line year and thus accu­mu­lated impact accounting)
• Iden­tify the key build­ing blocks and oppor­tu­ni­ties that project-level net impact account­ing offers;
• Present the account­ing foun­da­tions for build­ing con­sis­tent, stan­dard­ised State­ments of Nat­ural Cap­i­tal Posi­tion and Per­for­mance (i.e. Nat­ural Cap­i­tal Bal­ance Sheet and Profit & Loss respec­tively) for cor­po­rate report­ing and dis­clo­sure on net changes in nat­ural cap­i­tal, for dif­fer­ent sets of accounts, values.