Natural and financial accounting
Natural Capital Accounting & Financial Statements
This section of our site explores the key differences between Natural capital accounting statements and financial statements. It includes a series of videos that look at these differences from the context of both financial accounting and environmental professionals.
Recap a natural capital account is a systematic way of collating financial, socio-economic and environmental information about an organization’s impacts and dependencies on nature and presenting it in formats that are familiar to decision makers.
Recap "Financial statements are written records that illustrates the business activities and the financial performance of a company. Inmost cases they are audited to ensure accuracy for tax, financing, or investing purposes." (1. PwC, 2020).
Introduction to relevant guidance
As part of this discussion the videos reference two pieces of guidance available to finance and environmental professionals that help to show links between nature, finance and business decision-making. Note for environmental professionals the guidance refers particularly to roles relating to the implementation of the recommendations of the Taskforce for Nature-related Financial Disclosures (TNFD) framework.
Global Accounting Alliance guidance on implementing nature
The Global Accounting Alliance have released a guidance document which provides accountants in business and practice with practical guidance for implementing nature into their roles in a global context. The guidance sets out key concepts, the importance of nature in accounting, and how to integrate nature into financial accounts and accounting activities.
The guidance sets out practical actions for five different roles: Board members, Senior managers, Analysts, Report preparers, External auditors and assurance practitioners.
You can read the report here.
Primer on roles and reporting using the TNFD framework
ISEP formally IEMA have developed a primer on roles and reporting using the Taskforce for Nature-related Financial Disclosure (TNFD) framework. The primer focuses on identifying where different roles within a business are likely to encounter and engage with the TNFD. While this is mostly orientated towards sustainability and environmental professionals, the primer provides useful insights into the relevance of the TNFD for four roles: Senior leaders, Managerial, Specialists, Entry level.
ISEP members can download the report for free here. Non-members can purchase the primer in the ISEP shop.
Natural Capital Accounting & Financial Statements video series
Little Blue Research's Dr Stephanie Hime, in collaboration with Rosie Dunscombe (Blue Crane Consulting), have launched a video series discussing the role of nature in financial accounting and the difference between natural capital accounts and financial accounts.
