New report about the 'materiality' of natural capital

A new collaborative report, aimed at Chief Financial Officers, accountancy professionals and business leaders, investigates the concept of materiality and how it may be used in response to declining natural capital.

Fauna & Flora International, through the Natural Value Initiative, has teamed up with the Association of Chartered Certified Accountants (ACCA) and KPMG to produce the report which will be launched in London today.

Natural capital – the stock of capital derived from natural resources such as biological diversity, ecosystems and the services they provide – is in decline globally. Civil society is increasingly concerned about the loss of natural capital, but are companies identifying and measuring these issues?

'Material' issues are those issues that could influence the users of financial accounts. Key stakeholders such as investors still largely judge corporate performance on the basis of measures of financial materiality.

The report, entitled "Is natural capital a material issue? An evaluation of the relevance of biodiversity and ecosystem services to accountancy professionals and the private sector", investigates the use of the materiality concept in light of the increased significance of natural capital as a business risk.

It identifies that although a handful of companies are reporting a substantial level of detail on aspects of natural capital, the majority report little or no information.  The study, (which involved a review of disclosure practices, semi-structured interviews with Chief Financial Officers and senior managers as well as a survey of ACCA membership) sheds light on the barriers to corporate action and provides targeted recommendations.

More information:
www.fauna-flora.org/wp-content … ssue-full-report.pdf
www.naturalvalueinitiative.org/

Provided by Fauna & Flora International