Accountants must understand the concepts, principles, challenges and opportunities of nature related reporting to engage with boards and management on this increasingly vital issue.
The global accountancy body ACCA has issued a paper Empowering business: navigating nature-related reporting, designed to assist accountants supporting organisations to undertake nature-related reporting and drive meaningful action to tackle the sustainability-related challenges.
Jessica Bingham, Regional Policy Lead for ACCA and the report author, said: ‘Nature is the foundation for all life on Earth, and our research suggests that an overwhelming number of organisations do not effectively assess and communicate their impacts and dependencies on nature’.
Organisations are increasingly disclosing their impacts and dependencies on nature, especially with the advent of the Corporate Sustainability Reporting Directive (CSRD) in Europe. The International Sustainability Standards Board (ISSB) has recently announced that it plans to carry out research into biodiversity, ecosystems and ecosystem services as part of its work plan over the next two years, with a view to developing global reporting standards.
These changes will require accountants to increase their knowledge in this area. A core element of reporting these matters is setting out an organisation’s material nature-related impacts, dependencies, risks and opportunities and underpins interconnections between the natural, social and human capitals.
The key messages in the report will be discussed by Jessica Bingham at COP 16 on biodiversity in Colombia 21 October - 1 November, including a panel discussion with other entities including the standard setter the Global Reporting Initiative and financial services provider S&P Global.
ACCA’s research, in collaboration with the University of Glasgow, found that 95% of the 183 early adopters of disclosures recommended by The Taskforce on Nature-related Financial Disclosures (TNFD) have policies or commitments to halt and reverse biodiversity loss. However, only 35% have policies and commitments informed by 2030 and 2050 global diversity frameworks (GBFs). Organisations that are already working with accountants on Task Force on Climate-related Financial Disclosures (TCFD) are giving themselves a head start in developing nature related reporting, making themselves more resilient and managing their impact on nature.
The rise of nature related reporting is an opportunity for individual accountants and the profession across strategic planning, value creation, risk management, regulatory compliance, partnership development and decision making processes.
Bingham said: ‘Nature-related reporting is increasingly recognised as an essential component of organisational reporting. The role of accountants in this domain is pivotal in driving sustainable business practices and ensuring long-term financial health and environmental stewardship’.
Read the report.
