14 September 2020
Australian not-for-profit Accounting for Nature has an ambitious vision for natural capital accounting standards – for every nation to be able to measure, verify and certify changes in the condition of their environmental assets.
Without being able to assess whether an environmental condition is improving or degrading, it is impossible to establish whether an investment, policy decision or product purchase is having an impact on the environment, the not-for-profit points out.
"Currently, a trusted global accounting standard for measuring the condition of the earth's environmental assets — whether these are on a farm, government or private nature reserve, or at a regional scale — is yet to be developed and accepted by both scientists and end-users around the world," Adrian Ward, CEO of Accounting for Nature, tells Environmental Finance. "Solving this global challenge will unlock billions of dollars for environmentally sustainable and profitable investments. That is the challenge Accounting for Nature is aiming to solve," Ward adds.
The Accounting for Nature natural capital accounting framework aims to fill this gap, by enabling users to conduct due diligence and to determine changes in environmental condition in a transparent and verifiable way.
At the centre of the framework is EcondTM – an index that communicates changes in environmental assets over time and can be used to help make investment decisions.
The framework allows organisations, governments, and individuals to routinely generate environmental accounting reports that are aligned with the financial reporting of assets, transactions, and net value added.
Some of Accounting for Nature's established partnerships include:
- Bush Heritage Australia (its 30,000ha Eurardy Nature Reserve in West Australia is the first to have an EcondTM index)
- Landcare Australia (5,400 community-based land restoration groups)
- CO2 Australia (a carbon offset project aggregator)
- Wentworth Group of Concerned Scientists (an Australian environmental science and policy lobby group)
- 10 Deserts Program (a network of Indigenous-managed lands)
- Impact Agriculture Partners (a $160 million impact investment portfolio)
- Queensland Trust for Nature (The EcondTM has been applied to a 3,000-hectare property)
- Green Collar (Australia's largest carbon aggregator, with the EcondTM being applied over 3 million hectares of carbon projects)
- Tasmanian Land Conservancy (The EcondTM has been deployed across its 11,000-hectare Five Rivers Reserve)
- Kilter Rural ($500 million impact investment portfolio).
The Accounting for Nature Framework and EcondTM have been designed to complement and work within existing standards and certification systems for measuring the health of natural capital around the world, such as the UN's Sustainable Development Goals, Aichi Targets and the Global Impact Investment Network's IRIS Metrics. It is also compatible with the UN's System of Environmental-Economic Accounting (SEEA).