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.
Supplied by: Synergiz
Download the paper (pdf): Net impact accounting for renewable natural capital