Business and Natural Capital Accounting
Towards alignment between public and private sector Natural Capital Accounting
There is an increasingly recognition within the private sector of the importance of including the environment in corporate reporting. Companies around the world are already compiling voluntary, and statutory sustainability reports and integrating environmental information alongside financial information.
The Natural Capital Accounting and Valuation of Ecosystem Services (NCAVES) project workstream on business accounting aims to assess the alignment between the SEEA Experimental Ecosystem Accounting (SEEA EEA), as an integrated framework for ecosystem accounting, and business accounting. This workstream aims to improve dialogue between national statistics offices and businesses with the objective to:
- Contribute to the alignment of natural capital accounting by the public and private sectors;
- Explore how to harness synergies between private and public sectors in the collection and use of statistics and data for natural capital accounting; and
- Provide technical methodological contribution at the level of methods or indicators that promotes alignment
This workstream also contributes and builds further on the work by the Combining Forces initiative, set up by the Capitals Coalition.
The Roadmap to align business accounting and the SEEA
To drive forward alignment between the SEEA and business accounting, a roadmap was created in pursuit of the strategic decision taken by the UN Committee of Experts on Environmental-Economic Accounting (UNCEEA) to work towards alignment between SEEA and private sector natural capital accounting. This first version of the roadmap, which covers 2020-2025, draws from the outcomes of a business consultation and the scoping workshop held in New York in 2019; further reflections within UNSD in the recent months; feedback collected during different occasions where the findings of this project were presented, as well as bilateral discussions with the European Commission and the Capitals Coalition.
This roadmap is the result of three main activities that took place to advance this workstream:
- a literature review of current practices in business accounting and reporting related to ecosystems and ecosystem degradation and restoration, the findings of which were reported in a ‘background paper’;
- a business consultation with 12 companies to explore their interests and needs in terms of data collection and accounting/reporting related to impacts and dependencies on ecosystems; and
- the organization of a scoping workshop, bringing together national statistical offices (NSOs), businesses, standards setters and other stakeholders. This workshop was instrumental in providing a basis for the present roadmap.
The roadmap is structured around four main building blocks: coordination, communication, methodological development and capacity building.
As part of the roadmap the NCAVES project is currently conducting pilot case studies with selected companies (in the Netherlands with a global dairy company; in Spain and India with a mining multinational), with a view to:
- Assess alignment between the sustainability monitoring approach for the environment with the emerging SEEA EEA guidelines;
- Explore the availability of national and/or global data on natural capital and the extent to which it could be of use for the purposes of natural capital assessments and accounting
- Identify opportunities for improving available national and/or global natural capital data, i.e. for making natural capital information compiled at the national or global scale more user friendly and tailored to the needs of the company.
Results of these pilot studies are expected to become available by Q1 2021.