Interest in Natural Capital Accounting is increasing in the private sector, fuelled by the anticipated publication of the Natural Capital Protocol in July 2016. The ‘corporate natural capital accounting’ (CNCA) framework, developed in the UK, is akin to a financial balance sheet for natural capital assets, comparing the asset value to the cost of maintaining this value. It is particularly suited for land managing organisations.
This year, the method has since been applied for the first time at a large scale, by Forest Enterprise England to the public forest estate (around 254,000 hectares; approximately 1% of England) and the Duchy of Cornwall to its rural estate (around 55,000 hectares). This work has built on the organisations’ existing financial accounting and property management systems. It has provided valuable experience about the use of the method, and insights for the organisations involved that have improved strategic thinking.
For Forest Enterprise England the account has been the first application of the CNCA framework to an organisation’s entire estate. The full value of the public forest estate is transparently and coherently reported in the account, which combines financial data with analysis of the estates’ wider value to society.
Simon Hodgson, chief executive of Forest Enterprise England, commented “The government has made a long term commitment to keeping the public forest estate in public ownership and so it is important that we understand the full benefit of England’s national woods and forests to society and that we manage for the long term to increase its natural capital and deliver greater public benefit.
The CNCA approach enables us to understand and communicate the value of the public forest estate to government and society and to understand how the decisions we make about managing the estate impact on its value over the long term.”
For the Duchy of Cornwall, the account has developed the links between the Duchy’s detailed asset register of its tenanted land to published evidence on the value of natural capital assets, including outputs from the UK National Ecosystem Assessment.
Andrew Phillips, rural finance director for the Duchy, noted “We have gained a new perspective by comparing natural capital values to the rents and maintenance costs already captured in our financial accounts. These comparisons help organise environmental priorities across different parts of the estate – such as highlighting the wide range of values associated with management of Dartmoor, and for understanding the relative importance of stores, emissions and sequestration of carbon in different parts of the estate.”
An event discussing this work is being hosted by ICAEW and in partnership with eftec, Forestry Commission and the Duchy of Cornwall on: 26 April 2016; 15:00 – 19:00 at Chartered Accountants Hall, Moorgate, in the City of London.
There is no cost to book on to this event.
Click HERE to register and for further information.
 The corporate natural capital accounting (CNCA) framework was developed in 2014 for England’s Natural Capital Committee, by eftec, PwC and RSPB.