As highlighted in the Sustainability and business — the call to action; build back better report, AICPA® and CIMA® started a programme of thought leadership to explore accountancy and sustainability. This is part of a series of briefs exploring the topic of sustainability, business, and the finance professional’s key role. These briefs will help organisations consider the sustainability issues, how to integrate them into their long-term decision-making, and how to incorporate these issues into internal and external reporting.
Although this report focuses on accounting for nature, we recognise that a three-fold crises of, a climate emergency, dramatic nature loss and rising social inequality affect the planet. Addressing this will require systems thinking across the three crises as companies reallocate resources, reorientate production and reimagine their business models. It is the poorest in the world that are disproportionately affected by and impacted by climate change and nature loss. Our goal must be to make it possible for low-income people to climb a ladder without making climate change and nature loss worse.
Nature is everyone’s business. Every business relies on nature for resources and ecosystem services such as water, food, fiber, minerals, pollination of crops, water filtration and climate regulation in their operations, supply chains and for their employees and customers. Protecting nature within these ecosystems is foundational and critical to long-term human well-being, healthy societies and resilient economies.1
GAA — A call to action in response to the nature crisis
This accounting for nature report is designed to help finance professionals build their nature literacy so they can lead and support their organisations’, firms’ and clients’ journeys to adapt business models and reduced their impact on biodiversity in the global race to be nature positive. Finance professionals are ideally placed with the skill sets and knowledge to make a difference. These include insights in organisational governance, strategy, risk management and performance (through metrics and targets), to support nature-positive decision-making, built upon the skills of business analysis, and assurance of both financial and non-financial data. However, a wider understanding of the natural capital will require a rethinking and a critical awareness of impacts on global economic systems and organisational business models.
Upfront, a health warning. This is going to be messy. Accounting for nature is not a quick tick-box exercise in a global goal to reverse nature loss. Given the complexity of the task ahead for society, governments, organisations, and individuals, quick-fix solutions that fail to acknowledge the interconnectedness across the three crises could worsen things. Nature loss exhibits the characteristics of what the authors Rittel and Webber called ‘wicked problems’.2
The characteristics of ‘wicked problems’ include,
Difficult to formulate.
It is never clear when a solution has been reached.
They don’t have true-or-false solutions, only good or bad, according to the perspective taken.
A solution will have long drawn out consequences that need to be considered in evaluating it.
An attempted solution will change a wicked problem so it is difficult to learn from trial and error.
There will always be untried solutions that might have been better.
All wicked problems are essentially unique; there are no classes of wicked problems to which similar solutions can be applied.
They have multiple, interdependent causes.
There are lots of explanations for any wicked problems, depending on the point of view.
Solutions have consequences for which the decision-makers have responsibility.3
In March 2022, AICPA & CIMA signed the Global Accounting Alliance’s (GAA) call to action on nature for the accountancy profession. The call highlights the vital role professional accountants play and should commit, to helping reverse the process of nature loss by,
Understanding how their organisations and clients impact and rely on nature.
Providing sound advice and services that contribute to an organisation’s positive effect on nature.
Providing relevant and meaningful decision-making information supporting investment that protects and restores nature.
Actively supporting the alignment of investment and expenditure flows to nature-positive outcomes.
Contributing to disclosure on biodiversity-related risks and impacts.
Contributing to the efforts of an organisation to innovate and scale up products and technologies with a lower impact on nature.4
In December 2022, 195 countries came together in Montreal, Canada, for COP15 and agreed a new set of global goals to protect and restore nature by 2050: the Kunming-Montreal Global Biodiversity Framework (GBF). These goals will need to be at the heart of and driving an organisation’s accounting for nature journey.
