Natural Capital Accounting
Governance Research Digest – December 2012
The report, “Is natural capital a material issue?”, produced by ACCA, KPMG and Flora and Fauna International explores the extent to which the increasing significance of natural capital is reflected in accountancy practices. The analysis incorporates the results of a survey of over 200 accountancy professionals, interviews with CFOs/senior management from eightmajor companies, a disclosure survey of corporate reporting by 40 organisations in specific sectors, and desk-based research.
- The majority of accountants are reporting little or no information on the issue of natural capital stocks.
- 49 percent of survey respondents identified natural capital as a material issue for their business and linked it to operational, regulatory, reputational and financial risks.
- Only a handful of companies in sectors with high environmental impact are reporting substantial detail on biodiversity and ecosystem services (BES), and the majority are reporting little or no information owing to the perceived immateriality of the issue.
- In some cases, an item or issue relating to biodiversity and ecosystem services is measurable in financial terms and, therefore, included in the quantitative elements of the accounts.
- CFOs need to use their board position to educate other board members on the importance of BES within key management and strategic decisions.
ACCA, KPMG & Flora and Fauna International