B@B Workstream 1: Natural Capital Accounting (NCA) for Business: Briefing Note and Questionnaire Survey – May 2015 Briefing Note Project title Natural capital accounting linkages between businesses, governments and financial institutions: Applications, approaches and data use. Year 2 objective The objective of Workstream 1 for year 2 (2015), as agreed by the Bureau, is to: ‘Investigate natural capital accounting linkages between businesses, governments and financial institutions, with a focus on applications (i.e. uses), approaches (e.g. methodologies and tools), data requirements and data sources. Approach The approach to the study comprises the following tasks: Briefing Note: This briefing note sets out the aim, approach and background explaining this year’s studyi. Questionnaire survey: A questionnaire survey has been designed and is available for any B@B NCA workstream member to complete. It is appended to this Briefing Note and can be accessed from the EU B@B Website. Membership of the EU B@B Platform is free and is open to any organisation or individual with appropriate experience or interest (join here). The aim is to elicit views of business, governmentii and financial institution representatives on uses, methodologies, data requirements and data sources in relation to natural capital accounting, in particular focusing on biodiversity and ecosystem services and monetary valuation. Others may also complete the survey (e.g. representative organisations, NGOs, consultants and academics), filling it in based on their understanding and experience relating to one or more of the three categories of organisation (i.e. business, government or financial institutions). Please complete a survey form and return to james.spurgeon@sustainvalue.co.uk by 1 June 2015. Initial Report: An initial report will set out the results of a brief literature review and analysis of the questionnaire survey responses. The document will begin to highlight the key linkages between business, government and financial institution applications, approaches, tools and data requirements etc. Workshop: A workshop will held in Brussels in late June/July 2015 to discuss the initial report and brainstorm the linkages. Priority for attending the workshop will be given to Full Members of the NCA workstream, Member State participants from government positions and financial institutions members (whether Full Members or Observers). We will aim for around 15-20 people. Other B@B member participants may be invited depending on the quality of their survey response and demand for places to attend. Selected attendees may be invited to deliver 5-10 minute presentations. Final report: The initial report will be updated based on the workshop findings and a further targeted literature review. It will be circulated to all NCA workstream members for review prior to finalisation. i The study is limited to under 25 days of technical input, so outputs will focus on the interests of organisations involved (e.g. large businesses & national governments). There will be no country-by-country or sector analysis. ii Government will primarily be taken to mean national government, although local governments are also welcome to respond. Please differentiate where necessary. 1 B@B Conference: The report will be launched at the B@B conference to be held in October 2015. Year 1 outputs and recommendations Last year’s natural capital accounting (NCA) for Business workstream involved 10 businesses helping to develop a guide and decision-matrix tool that can help companies decide from 11 categories of NCA for Business approaches which is best for their needs. The approaches range from qualitative assessment of impacts and dependencies to developing annual sets of monetary accounts for natural capital impacts. The outputs were based on a broad agreed working definition of NCA for business: ‘Identifying, quantifying and/or valuing environmental dependencies and impacts to inform business decision-making and reporting’. A recommendation from the work was the need to map out different NCA applications and approaches used by governments and businesses to explore key linkages and differences. This is the focus of this year’s study, which has been expanded to include financial institutions and data availability too. Initial ideas on the Study Business, Governments and Financial Institutions all have their own requirements, uses and approaches for undertaking natural capital accounting. It is apparent that although similar in many respects, there is much divergence too. To further advance the uptake and acceptance of natural capital accounting there is a need for greater consistency and collaboration. In this study we will explore the similarities, differences and scope for greater alignment and collaboration. The study will explore, amongst others, the following types of issue: How do national natural capital accounting approaches align with business NCA approaches at a company level? Are they attempting to measure the same issues and parameters using the same metrics? This will in particular consider how the UN SEEA System of Environmental Economic Accounting ‘Central Framework’ and ‘Experimental Ecosystem Accounting’ compare to business approaches, such as the Environmental Profit and Loss Account and other Balance Sheet approaches. It will also evaluate how other EU Member State national approaches such as the UK’s National Ecosystem Assessment and the UK’s Natural Capital Committee’s Corporate Natural Capital Accounts inter-relate with other approaches. What are the data requirements and data held by each of the different types of organisation, and what scope if there for greater collaboration over data use? What is the relevance of government instigated Payment for Ecosystem Services (e.g. watershed management payment mechanisms) for businesses and financial institutions? To what extent are businesses also implementing PES? Are the same quantitative and monetary valuation techniques being used to inform them? How do government applications and approaches for quantifying biodiversity offsets compare with what businesses are doing? Are they the same? Is anyone using monetary valuation or mainly quantitative metrics? Are governments and businesses considering natural capital impacts and values in the same way in option appraisals that evaluate major projects and green infrastructure schemes? Do businesses and governments use NCA approaches, and in a similar way to inform land use planning and zoning? Are businesses, governments and financial institutions all investigating the same type of natural capital risks and in the same way? Can financial institutions draw upon work undertaken by governments and businesses to inform their risk assessments for sectors and companies? How are governments using natural capital valuation to inform environmental taxes and environmental liability/natural resource damage assessments? Are businesses and financial institutions aware of this and the implications? 2 Are governments exploring the societal value of ecosystem services (such as water provision) with a view to encouraging increased charges to reflect environmental impacts? To what extent are private companies doing this too – are they using the same approaches? 3 B@B Workstream 1: Natural Capital Accounting (NCA) for Business – Questionnaire Survey – May 2015 PLEASE RETURN THE COMPLETED SURVEY AND ANY SUPPORTING MATERIAL (e.g. KEY REFEERENCES), TO THE WORKSTREAM LEAD, JAMES SPURGEON, at james.spurgeon@sustainvalue.co.uk by Monday June 1st. Use the empty box under each question to give your answer – the text box will enlarge to accommodate your text. Please save this file with your name attached and send your reply as a Word document (not pdf). Survey focus: Although all aspects of the environment are covered, the main focus should be on biodiversity and ecosystem services. Also please focus more on ‘monetary valuation’ of NCA. If necessary, refer to the ‘Guide to selecting an NCA approach’ for definitions & examples. NOTE: The B@B NCA Guide to approaches to NCA can help clarify terminologies and provides an overview of example NCA applications, approaches, methods and tools. PLEASE READ THROUGH ALL QUESTIONS BEFORE ANSWERING ANY. 1. Name and organisation 2. Which of the following categories of organisation does your response cover: Business, Government (national or local) or Financial Institution? NOTE: Ideally select one only. If you want to cover more than one, either complete separate forms for each, or specify under each subsequent question which part of your answer relates to each category. 3. What do you think are the main applications (i.e. uses) of natural capital accounting and valuation for your category of organisation? NOTE: List out and number each application, and describe briefly – the more specific the better. Also specify any ‘potential’ (i.e. as yet not applied) uses for the category. Identify if they are your organisation’s applications or are just generally used by your category of organisation. NCA ‘Applications’ include: National accounts, company P& L and Balance Sheet accounts, biodiversity offsetting, option appraisal, risk assessment, environmental liability, payments for ecosystem services, setting strategy, etc. 4 4. For each application listed in Q.3 above, what NCA approaches and methodologies are used by your category of organisation? List or refer to the application number and specify the approaches (see examples below) and methods (e.g. specific valuation techniques, cost benefit analysis, Net Present Values) typically used. Identify if this is your organisation’s approach or just generally used by your category of organisation. NCA ‘Approaches’ include: Impact and dependency assessments, risk assessments, use of indicators, monetary valuation, sustainability reporting, financial accounts, integrated reporting etc. 5. For each application listed above, what NCA tools are currently used by your category of organisation? Copy your list/numbers from Q.3 and specify which tools relate to each application. 6. What do you think are the key links, if any, between NCA applications and approaches used by your category of organisation (government, business or financial institution) compared to those used by the other two categories of organisation? 7. What do you think are the main data needs and gaps (i.e. data sets) for your category of organisation to undertake NCA Accounting (especially relating to biodiversity & ecosystem services)? 8. What data sets does your category of organisation typically have that may be useful for the other two categories of organisation to draw upon (especially relating to biodiversity & ecosystem services)? 9. What types of data do you think the other two categories of organisation could usefully make available to you? 5 10. What other comments/questions do you have on the potential linkages between business, governments and financial institutions with respect to NCA? 11. What other documents or on-going studies do you think could usefully inform this study? Feel free to attach useful documents or insert links. 12. Are you interested in attending the end of June/July Workshop? Many thanks for completing the survey. 6