This report presents an evaluation of the relevance of biodiversity and ecosystem services to accountancy professionals and the private sector.
Natural capital – the stock of capital derived from biological diversity and ecosystems as well as natural resources such as fossil fuels – has huge importance for business and society.
Biodiversity and ecosystems give rise to ‘ecosystem services’, defined as the benefits, closely dependent on biodiversity, which human beings obtain from ecosystems. These benefits include access to food and water, protection from threats such as floods and disease, recreational opportunities, and services like photosynthesis that maintain conditions for life on Earth.
This report, by ACCA, KPMG and Fauna & Flora International, highlights how the benefits deriving from biodiversity and ecosystems (and the risk of their loss) are rarely considered to be material by companies.
The report demonstrates the lack of a standardised business case for considering biodiversity and ecosystem issues is a barrier impeding companies from effectively determining risk and opportunity exposures. So too is a basic lack of awareness among accounting and business communities of natural capital issues.
Given the importance of biodiversity and ecosystems to business and society, CFOs and accountancy professionals have an important role to play in developing new valuation, accounting and reporting approaches.
CFOs, for example, need to engage with experts to understand the extent to which their organisations depend on natural capital – including the degree to which company revenues, costs and going concern status rely on natural capital, directly and indirectly.
CFOs should also: