Unpacking corporate natural capital accounting (BS 8632, BD Protocol & UN SEEA): comparative analysis of case studies

A working definition of Corporate Natural Capital Accounting (CNCA) has recently been proposed: ‘the systematic process of identifying, measuring, recording, summarising and reporting the periodic and accumulated net changes to (a) the biophysical state of natural capital assets and (b)the associated values of natural capital to business and wider society’; alongside several accounting principles and building blocks. Notably, it puts the going concern / viability of natural capital assets at the core of thecorporate accounting process. CNCA draws from three main methods: The Biological Diversity Protocol(BD Protocol), the British Standard 8632:2021 Natural Capital Accounting for Organisations (BS 8632), and the UN System of Environmental-Economic Accounting – Ecosystem Accounting (SEEA EA). This paper presents a comparative analysis of publicly available case studies, based on these CNCA-related methods and focused on ecosystem accounting. It aims is to showcase the key synergies and differences, highlight key limitations and make recommendations towards greater standardisation. 8 criteria from the working CNCA definition are used to that end: (1)ecosystem asset register, (2) ecosystem extent measurement, (3) ecosystem condition / integrity measurement, (4) ecological equivalency principle,(5)recording rules based on double-entry bookkeeping, (6) ecosystem-specific biophysical statements of position and performance, (7) valuation perspective and methodology and (8) organisational and value chain boundaries. Neither case study nor CNCA-related method cover all the dimensions of the working CNCA definition. While this comparative analysis shows broad alignment between the case studies using SEEA EA and BS8632, significant differences were found with the one using the BD Protocol. The comparative analysis shows how different purposes condition the rules, principles and measurement / valuation techniques underlying each case study and associated CNCA-related method. Differences in application of Criteria 1, 4and 5 appear to be the primary causes of divergences. To conclude, recommendations to bridge the gaps between CNCA-related methods are organised into two broad themes: (a) the need for complete ecosystem state accounts in the context of the Global Biodiversity Framework(GBF) and (b) the need for segregated land use accounts with clear distinction between financial and non-financial values.

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