Reporting on natural capital is low priority

16th July 2015

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Related tags

  • Business & Industry ,
  • Ecosystems ,
  • Biodiversity ,
  • Natural resources


Simon Park

Businesses want improved decision making to be the main aim of the first global protocol on natural capital, with external reporting an aspiration for the future.

The finding comes from a report outlining feedback from businesses on the principle of a protocol, which is being developed by the Natural Capital Coalition (NCC), a group of businesses, accountancy firms, consultancies, academia, policymakers and governments.

The NCC interviewed over 80 global businesses across 15 sectors about what they want to see from a protocol and what they believe would drive uptake.

Businesses overwhelmingly said that the protocol should first and foremost generate information that will help them make decisions that take into account their dependencies and impacts on natural capital.

It should help organisations understand how these impacts and dependencies translate into commercial, operational, financial and strategic risks and opportunities, they said.

Although a small number of companies participating in the research acknowledged that reporting could help to drive internal change, most said that reporting externally on natural capital was not yet a corporate priority. However, many indicated that they would like to do so in the future.

Mark Gough, executive director at the NCC, said that it was right for reporting not to be introduced at the outset of the protocol: “Businesses want to know risks and opportunities. Once they’ve done that, worked out actions and started taking them, then they can report on it.”

There would not be much benefit from reporting on natural capital yet since there would be nothing to disclose, he added. Gough also said a standard way of disclosure would need to be developed before companies started reporting.

Businesses also said the protocol should:

  • Help financial investors make decisions about the management of their portfolios.
  • Support operational decision-making, such as determining the location of a new site, changing a production or distribution process, or using substitute materials.
  • Be easy to use and flexible enough to meet the needs of a specific business.
  • Be aligned with other international initiatives, such as environmental profit and loss accounting, and existing good practice so it complements these rather than being an additional requirement.
  • Stress the commercial opportunities that could come from evaluating natural capital rather than focus solely on the risks.

The draft framework is available here. NCC will launch a broader consultation with businesses on the issue at the Natural Capital Forum in Edinburgh in November. The final protocol is due to be launched in June 2016.


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