New Delhi, 24th September,2015: In their latest joint paper dealing with the issue of Natural Capital Accounting (NCA), three leading professional, campaigning and business organisations say that the accountancy profession has an important role to play in promoting the concept of NCA among businesses, investors, governments and wider society.
The Association of Chartered Certified Accountants (ACCA), Flora & Fauna International (FFI) and the professional servicesfirm KPMG say that growing interest in NCA is driving a range of initiatives developing tools and frameworks for entities and advisers. NC impacts and dependencies, risks and opportunities are being seen increasingly as potentially material issues that businesses and investors should manage.
This has direct relevance for the accountancy profession. Not only can members of the profession play a part in developing common approaches to NCA, but they can also help to embed its application in business decision making. The three bodies argue that such participation is already taking place, and presents a real opportunity to improve performance in relation to NC. But they also argue that more could be done.
Faye Chua, head of business insight at ACCA argues that although the accountancy profession is already playing an important role in the natural capital arena, more could be done:
“The modern accountant has a responsibility to ensure today’s businesses are able to operate long into the future. It is important therefore that the finance function is wise to the potential weaknesses of financial systems in their ability to protect natural capital.
“As with everything that presents both risk and opportunity for the business, finance professionals need to make sure they facilitate high-quality management decision making when it comes to Natural Capital. To do that, they must gain a deeper understanding of how other business disciplines approach natural capital issues and use that knowledge to identify new ways of thinking about the value it can bring.”
Gordon Wilson, Senior Manager, Sustainability Services, KPMG in the UK says “I see the role of the accountant as a crucial one as NC accounting and reporting develops. This role is to connect the complex world of NCA and align it to how business leaders think, make decisions, operate and report their performance to their investors and wider stakeholders.
“This provides a platform for trust between capital owners and capital users. NC accounting and reporting will become important tools for business leaders to articulate how they are performing from an economic, social and environmental perspective, and their impacts in these areas.”
Paul Herbertson, Director Environmental Markets, Fauna & Flora International (FFI) looks at the bigger picture, saying that “FFI’s vision is a sustainable future for the planet, where biodiversity is effectively conserved by the people who live closest to it, supported by the global community.
“As shown in this report, the skills, knowledge and experience are certainly available within the accountancy profession, and steps are already being taken towards a new culture that incorporates NC as well as other sustainability issues. All that is needed now is for these activities to be scaled up and further embedded, and FFI hopes that this report will play a part in driving this much-needed change.”