natural capital accounting without notes by richard spencer

7/27/2019 Natural Capital Accounting Without Notes by Richard Spencer

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BUSINESS WITH CONFIDENCE icaew.com

Richard Spencer, June 2013

Natural Capital Accounting


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1. What is Natural CapitalAccounting?


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ICAEW 2013

Capitals framework


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ICAEW 2013

Natural capital


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ICAEW 2013

We use it because it is valuable,

we lose it because it is free.Pavan Sukhdev, TEEB Study Leader


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Tiered approach to Natural Capital

Recognise Demonstrate Capture

Source: TEEB (The Economics of Ecosystems and Biodiversity)


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ICAEW 2013

Different interpretations of corporate NCA

Natural capital

covered

Assurance?

Type of

measurement:

QL, QN, $

Internal vs.

external use

Stand-alone vs.

integrated report

Reporting boundary:

direct vs. indirect impacts


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ICAEW 2013


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2. Why useNatural Capital

Accounting?


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Risks and opportunities

Biodiversity

loss

Energy

security

Climate

change

Technology

Legislation

Population

growth

Resourcescarcity

Powershifts

Financial

stability


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ICAEW 2013

Future proofed decision making

Benefits of integrating environmental and social information intodecision making:

Greater understanding of future risks and opportunities

More strategic responses to changing economic,environmental and social conditions.

Linkages between strategic direction, financial performanceand sustainability impacts can be made, therefore driving abetter and more sustainable financial returns into the future.


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Future proofed decision making


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Behavior change drivers and challenges for

Natural Capital Management in 26 earlyadopter businesses

Resource scarcity concerns in 3-5 years Freshwater, climate regulation, fibre and food

Delayed action is a business risk

Challenges :- Lack of harmonised methods

Lack of government regulation & customer demand

Research: Business case


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ICAEW 2013

Research: Business case and priorities

US$ 7.3 trillion pa global environmental externality costs (2009)

Natural Capital at RiskTop 100 Externalities of Business ,Source: Trucost for TEEB for Business Coalition, 15 April 2013, www.teebforbusiness.org
http://www.teebforbusiness.org/http://www.teebforbusiness.org/


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3. Who is usingNatural Capital

Accounting?


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TEEB for Business Coalition(The Economics of Ecosystems and Biodiversity)

Who and what Global multi-stakeholder coalition supporting

uptake of natural capital accounting in business

Activities

Growing the business case Business focused research

Support development/business pilot testing of harmonisedframework, methods, tools & data for valuing environmentalexternalities in business and investor decision making

risks & opportunities

enable better measurement, management, reporting andinvestment


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TEEB4BC Board, Advisory & Observer Groups
http://www.corporateecoforum.com/index.php


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TEEB4BC - Members joining......ongoing


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TEEB4BC - Values & Locations

Not for profit

Pre competitive

Open source

Business, policy, practitioners

Global London & Singapore


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Environmental impacts (physical)


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Environmental P&L (monetary)


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Water accounting in Australia

Water availability is critical

Independent standard settingbody formed in 2006

Conceptual framework plusaccounting standards

1. Preparing accounts2. Assurance engagements

Corporate reportingboundaries, not catchment,basin or national ones

Physical units

Both stocks and flows of water


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Delivery of water accounting report to a user


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Water accounting: Illustration


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Other examples of Natural Capital Accounting?


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4. What is the roleof accountants in

NCA?


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Accountants as guardians of data integrity

Information and Reporting

Assurance process


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Accountants as leaders in sustainability


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Get in touch

www.icaew.com/sustainability

[email protected]
http://www.icaew.com/corporateresponsibilitymailto:[email protected]:[email protected]:[email protected]://www.icaew.com/corporateresponsibility


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A world leader

of the accountancy

and finance profession


natural capital accounting without notes by richard spencer

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