All our lives, societies, and economic activities depend on nature.
Natural capital is the world’s stock of natural assets that provide benefits to society, such as forests, fisheries, rivers, biodiversity, soils, minerals, the atmosphere and oceans, as well as natural processes and functions.
There are many different calls on organizations to document how you understand and manage your relationship with nature. It is a dynamic space filled with methods, tools, data, and requirements. Understanding our impacts and dependencies on it, and how these affect us, is complex. The aim of natural capital accounting is to reduce this complexity by collating all the data in one place and presenting it in formats that are familiar and meaningful for decision makers – through a natural capital balance sheet, and a natural capital income statement.
Natural capital accounting is a systematic way of collating financial, socio-economic, and environmental information about your organization’s impacts and dependencies on nature. It is a rare offer of a holistic treatment of all data, with focus on natural capital assets.
By organizations working within a natural capital accounting structure, you can identify and prioritise your data needs and select the most appropriate approaches that will support your decisions.
Natural capital accounting will also help you align with the Taskforce for Climate related Financial Disclosures (TCFD), Taskforce for Nature related Financial Disclosures (TNFD), the future requirements from International Sustainability Standards Board (ISSB), guidance from EFRAG for Corporate Sustainability Reporting Directive (CSRD), and taxonomies developed for sustainable finance.
The term ‘natural capital’ is used to emphasise the fact that a capital asset depreciates. But if we can maintain and enhance it, it will keep on giving.