Natural Capital
Accounting

We depend on nature.

 

Unfortunately, most of us forget about this when making business and policy decisions.

 

Environmental economists work to ensure we have better memories: we combine scientific evidence with economic analysis to make nature’s invisible values visible.

 

We reveal an organisation’s impacts and dependencies on nature and how financially material nature is for the organisation.

 

One way of doing this is natural capital accounting.

 

What is natural capital accounting?

Natural capital accounting is a systematic way of collating and analysing environmental, financial, and socio-economic information. It uses familiar and effective formats from financial accounting (with some necessary revisions): 

 

Natural Capital Balance Sheet

This shows the value of the natural capital assets, and liabilities of the organisation. Both the asset values and liabilities are projected over a relevant future period. Asset values include benefits derived from nature for the organisation and the rest of the society. Liabilities are the costs the organisation does, or plans to, incur to produce those benefits or to maintain the stock of natural capital assets. 

 

Natural Capital Income Statement

This shows the positive and negative changes due to the activities of the organisation during a given financial year. Changes that affect both the organisation and the rest of the society are shown.

 

Both statements show values to the organisation and to the rest of society. Both aim to show monetary values as much as possible but could also contain non-monetary information. Notes are prepared to show data sources and assumptions. 

 

The brochure on this page provides further detail on how NatCap Statements™ (eftec’s patented natural capital accounts) look, how they can help organisations and policy makers:

 

• think differently about nature,

• identify how to invest in what matters most, and

• monitor and disclose for nature markets and initiatives such as the Taskforce on Nature-related Financial Disclosures (TNFD).

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The brochure also shows who our clients are and why they commission natural capital accounts, as well as some quotes from them about the uses of the accounts.

Setting the Standard

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Setting the Standard

As the leaders in our field, we have been involved in the development of standards and our natural capital accounts are aligned to the following:

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• ISO 14008: Monetary valuation of environmental impacts and related environmental aspects – our CEO, Ece Ozdemiroglu was one of the UK experts developing this international standard.

• BSI 8632:2021: Natural Capital Accounting for Organizations – our CEO, Ece Ozdemiroglu is the Chair of the BSI’s Assessing and Valuing Natural Capital Committee that published this standard.

• ISO 14054: Natural Capital Accounting for Organizations – our CEO, Ece Ozdemiroglu is the Convener of the international Working Group preparing this standard building on the BSI8632

• BSI Natural Investment Standards – one of our Directors, Ian Dickie, is the Technical Author for the Principles Standard in this package of standards that are coming out for the benefit of nature markets.

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Contact Person: Ian Dickie