Natural Capital Reporting / Accounting for businesses
The focus of Natural Capital Reporting for businesses is either:
i) the assessment of annual environmental impacts incurred by part or all of the business value chain, or
ii) the state and change in environmental assets owned or under the responsibility of the company. Or a variation of these.
The boundary NCA reporting for businesses may be any of
 Tier 1 (Direct operations),
 Tier 2 (production of finished products and services),
 Tier 3 (processing of materials) and/or
 Tier 4 (extraction of raw materials).
Usually the report should look at the company as a whole, but it may also just be for a specific product, project or site.
Drivers of Natural Capital Reporting: Used for multiple purposes such as informing decision-making, understanding dependencies and impacts,
prioritising actions, identifying risk and opportunity hotspots, communicating with stakeholders etc.
Natural Capital Reporting Assessment tools:
 Accounting : Environmental Profit and Loss accounts
 Hot spot analysis,
 Materiality assessment
 LCA –life cycle assessment for products,
 EIA –Environmental Impact Assessment for projects,
 EMS –Environmental Management Systems for sites
 Indicator assessment (air emission quality, effluent volume, contaminated land assessment)
Mitigation hierarchy,: The Natural Capital Protocol advocates action in the following order of importance: to avoid, minimise, restore and offset
Businesses carrying out NCA may apply the mitigation hierarchy to their own natural capital impacts.
In context of damage assessments, this can ensure appropriate level of damages are paid to ‘compensate for or offset‘ the impacts of the business .
Companies may also apply these concepts to claim net positive credentials.
Comparison of Natural Capital Reporting to other current Environmental Reports required of businesses in Ireland
Reporting
Title
EPA Annual
Environmenta
l Reports
Origin Greenannual
recertification
Reporting
Drivers
 Legal,
 Corporate,
 Commerci
al
Legal
reporting
requirement
as part of
IED/ IPC
Licences
Commercial
driver: Market
Presence/
supply chain
advantage
Report focus:
Economic (EC)
Environmenta
l (ENV) or
Social (SOC)
ENV
EC
ENV
SOC
Companies affected
by Reporting
Sectors
Type of reporting



Compliance reporting
Indicator reporting / Environmental
Quality Standards:
Accounting – monetary valuation of
assets and stocks/ risks and opportunities
Any company
licensed by EPA, as
specified in the
revised EPA Act
2013 Schedule 1 of
activities
Depends of scale and
threshold of activity
Pharmaceutical,
Chemical Industry,
Cement plants,
Metal industry
Industrial
Agriculture
large food sector
large waste
treatment facilities,
Licence Compliance reporting
Any food company
can apply for 3rd
party certified
membership of the
Bord Bia Origin
Green programme
Food Producers
(farms)
Food Processors
Food Retailers
Indicator Reporting





Update of EMS
Objectives and Targets update
Update of process efficiency
Update of resource consumption (raw
materials, energy, CO2 emissions, water)
Emission Standard reporting (water, air
water emissions )


Update on process changes
Update on target progression and
achievements
Targets include




Raw Material supply
Energy, Carbon emissions, Water, Waste
reduction, Biodiversity (if chosen)
Health & Nutrition
Social sustainability
Areas relevant to
Natural Capital, not
covered by this
reporting
No requirement to
report on Natural
Habitats, Biodiversity
or Natural Assets,
unless already part of
company EMS, or site
located on/ near an
area of special
habitat/ protection/
Biodiversity (on site or
considered as part of
the supply chain) is
only included if it is
chosen as a specific
company target
Non-financial
reporting
Directive
2014/95/EU
Legal
corporate
disclosure of
non-financial
and diversity
information
EC
ENV
SOC
All companies with
500 employees or <
$50 mill revenue
All commercial
sectors
CDP/ GRI
Reporting
GRI and CDP have worked together over the years to ensure alignment in their indicators on climate change and energy,
improving the consistency and comparability of environmental data, and making corporate reporting more efficient and
effective. G4 guidance is designed to be compatible with a wide range of different reporting formats. Avoids duplication of disclosure efforts
CDP –Carbon
Disclosure
Programme
Reporting
Corporate /
Stakeholder
Driver –CSR
reporting
ENV
Online reporting
Disclosure by
organisations to their
investors &
stakeholders
CDP online climate
change scoring
methodology
Open for any
organisation
-mainly aimed at
large multinationals
All commercial
sectors
Indicator Reporting:
Climate Change - this info can also be reported
as part of GRI
Climate Change Risk, Opportunities, Emission
Data & Methodology; Energy, Emission GHG
Scope 1, 2, 3, Emission Trading;
Water Management this info can also be
reported as part of GRI
Forest management – production and use of
forest risk commodities (i.e. products
responsible for deforestation) –can be reported
in GRI as part of Supplier Assessment/ Product
Risk
Reporting of physical units and indicators, kgs/
tonnes of emissions/ cubic meters of effluent,
etc)
CDP Reporting looks at
environmental
impacts from carbon
emissions, threats and
opportunities of
climate change.
Broader Natural
Capital aspects are not
currently included.
GRI- Global
Corporate /
EC
Public disclosure by
All commercial
Indicator Reporting:
GRI Reporting looks at
2 year transition –
applicable from 2016
Companies may use GRI reporting guidelines or
ISO 26000 in the reporting of non-financial
assets. Reporting of physical units (tonnes of
emissions/ cubic meters of effluent, etc) as per
GRI Guidance.
Non-financial report may be submitted to
auditor separate from financial management
report, and published separately as CSR report.
Biodiversity/ Natural
Capital aspects could
be included here.
Reporting
Initiative
Stakeholder
Driver –CSR
reporting
Legal
requirement
in Sweden
for stateowned
companies
(2007)
Legal
requirement
in South
Africa for
companies
on stock
exchange
listing (2010)
Mandatory
for
companies
listed on the
Singapore
stock
exchange
(2014)
ENV
SOC
organizations on
their and their
stakeholders
economic,
environmental and
social impacts.
GRI Guidelines used
by corporations in
their annual CSR
reports
Open for any
organisation
-mainly aimed at
large multinationals
sectors
-
Economic
environmental, social
and economic impacts
 Flow of capital among stakeholders;
 Economic risks & opportunities due to Climate from the business
activities. Biodiversity
Change
, land and water
 Procurement practices –local supply chain
aspects are included.
Environmental
 Raw materials – renewable/ non-renewable/
recycled resources
 Energy consumption & reduction
 Water sources (well/ river/ public) &
consumption
 Water sources affected by usage incl
Biodiversity value
 Water % recycled or reused cc & reduction
 Biodiversity –lands owned/ leased in or near
protected areas
 Listing of protected status
 Impacts of operation on Biodiversity Value
 Habitats protected or restored
 3rd party partnership to protect habitats
 Amount of Red List species / endangered
species in areas affected by organisation
Emissions
 Air Emissions (GHG-Scope 1,2,3), NOx, Sox,
ODS, etc) & reduction initiatives
 Effluents –waste water discharge volume and
treatment
 Size and biodiversity of waterbodies affected
by discharges
 Waste types (reuse/ recycling/ incineration,
landfill) , volumes & reduction initiatives
 Mitigation actions to reduce environmental
Natural capital impact
and asset assessments
could be included in
these reports.
impacts of product & services
 Total environmental protection expenditure
Social
 Labour Practices, Equal Opportunity, Health &
Safety, Staff Training,
 Human Rights, non-discrimination, fair
investments, child labour, indigenous rights,
 Society; local communities, anti-corruption,
funding, legal compliance
 Product Responsibility, Health & Safety,
Labelling, Marketing, Customer Privacy
Environmenta
l Profit and
Loss Account
(EP&L)
ISO 14001
Identify
Financial risk
and
opportunitie
s for the
business
from its
environment
al impacts
and assets
EC
ENV
Corporate /
Stakeholder
Driver –CSR
reporting
ENV
Any organisation
-mainly aimed at
large multinationals
All commercial
sectors
Accounting – monetary valuation of assets and
stocks/ risks and opportunities
assigning monetary value for ecosystem
services
Can be part of the
company’s natural
Capital reporting
Methodology/ Guidance for EP&L developed by
Kering and PwC (2015)
The E P&L uses existing input-output models
and developed new valuation methodologies,
building on a large volume of work in the fields
of environmental and natural resource
economics such as TEEB, the UN study on The
Economics of Ecosystems and Biodiversity.
Any organisation.
Uptake mainly by
medium to large
companies
All commercial
sectors
ISO 14001:2015 and its supporting standards
focus on Internationally certified environmental
management systems.
Includes identification of environmental
Natural Capital
considerations could
be included in a
company ISO 14001 or
impacts and aspects, setting Objectives and
targets and continuous improvement loops.
Linked to ISO 9000 Quality system, ISO 15001
Energy Management system, etc.
informal EMS
ISO 26000
Corporate /
Stakeholder
Driver –CSR
reporting
SOC
ISO Standard /
Guidance
All commercial
sectors
ISO 26000 provides guidance on how businesses Not directly applicable
and organizations can operate in a socially
responsible way. This means acting in an ethical
and transparent way that contributes to the
health and welfare of society.
UK Corporate
natural capital
accounts
(CNCA) –
Corporate /
Stakeholder
Driver –CSR
reporting
EC
ENV
UK Defra-led ;
Natural Capital
reporting
UK organisations
mainly
UK Defra-led ; RSPB and PwC developed
framework for organisation to carry out Natural
Capital reporting
http://www.naturalcapitalcommittee.org/corpo
rate-natural-capital-accounting.html
Alternate or
complimentary
methodology to NCCProtocol
Integrated
reporting
(IIRC,
2014)
Corporate /
Stakeholder
Driver –CSR
reporting
EC
ENV
SOC
Creation of new
global reporting
framework for
corporations -lead to
the creation of value
over the short,
medium and long
term
Over 90 businesses
in the Pilot
Programme
Business Network
include Unilever,[6]
Coca-Cola,[7]
Microsoft,[8] China
Light and Power,[9]
Hyundai,[10] and
HSBC.[12]
Reporting on six forms of capital, one of which
is natural capital. Natural capital is defined as
‘all renewable and non-renewable
environmental resources and processes that
provide goods or services that support the past,
current or future prosperity of an organization.
It includes: air, water, land, minerals, forests,
biodiversity and ecosystem health’.
Natural Capital
Reporting is part of
the Integrated report
Main References:
 NCC_Draft Natural Capital Protocol 2015 http://www.naturalcapitalcoalition.org/ Global Natural Capital Reporting: TEEB, The Economics of
Ecosystems and Biodiversity.
 EC Europa B@B Workstream 1: Natural Capital Accounting for Business http://ec.europa.eu/environment/biodiversity/business/assets/pdf/