Natural capital accounting presentation at the xbrl euro filing 2017 presented by liv watson brad monterio
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The green gross domestic product (green GDP or GGDP) is an index of economic growth with the environmental consequences of that growth factored into a country's conventional GDP. Green GDP monetizes the loss of biodiversity, and accounts for costs caused by climate change.
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Natural capital accounting presentation at the xbrl euro filing 2017 presented by liv watson brad monterio
- 1. Natural Capital Accounting and XBRL Liv A. Watson Brad J. Monterio Co-chair, ICAEW Natural Capital Accounting Structured Data Task Force (INCA-SDTF) Eurofiling Conference – June 8, 2017 European Central Bank Frankfurt, Germany Co-chair, ICAEW Natural Capital Accounting Structured Data Task Force (INCA-SDTF) Sr. Director, Workiva Inc.
- 2. MISSION: The mission of the INCA-SDTF is to provide recommendations and guidance that will inform the UK's Office of National Statistics' (ONS) and the Department for Environment, Food and Rural Affairs (Defra) decision on whether to implement an XBRL strategy and program for its reporting framework. ICAEW Natural Capital Accounting – Structured Data Task Force OBJECTIVES: Assess feasibility of using the global XBRL data standard Ensure that natural capital information can be discovered, aggregated, analyzed, repurposed and communicated in a machine readable format
- 3. Natural capital is a way of defining the wide range of benefits that we derive from nature. It provides the air we breathe and the water we drink. It is essential to life and it underpins thriving societies and prosperous economies. - Natural Capital Coalition Natural capital is a critical asset, especially for developing countries where it makes up a significant share (36%) of total wealth. - The World Bank One of several recognized forms of capital (e.g., financial, manufactured) Supports all other capitals by providing essential resources, such as air, water, soil and minerals, supporting a healthy planet that underpins thriving societies, prosperous economies WHAT IS NATURAL CAPITAL? The stock of renewable and non-renewable natural resources (e.g., plants, animals, air, water, soils, minerals) that combine to yield a flow of benefits to business and society
- 4. Natural capital accounting is the process of calculating the total stocks and flows of natural resources and services in a given ecosystem or region. Accounting for such goods may occur in physical or monetary terms. WHAT IS NATURAL CAPITAL ACCOUNTING?
- 5. WHY PRODUCE NATURAL CAPITAL ACCOUNTS? Consistent way to look at significance of nature Identifies drivers of ecosystem change A key indicator of long-term living standards Need to adopt a broader definition of wealth Monetary valuation helps integrate economic and environmental data Raises awareness of economic significance Provides basis on which changes in value of components of natural capital can be recorded Develops an aggregate indicator of sustainability
- 6. UN SEEA CENTRAL FRAMEWORK The UN System of Environmental-Economic Accounting – Central Framework (SEEA-CF) defines environmental assets as “the naturally occurring living (biotic) and non-living (abiotic) components of the Earth, together constituting the biophysical environment, which may provide benefits to humanity.”
- 7. PROTOCOLPROTOCOL ENTITIES CDSB GRI SASB “GREEN GDP” “ENVIRONMENTAL PROFIT & LOSS" UN SEEA CDP QUESTIONNAIRE GRI REPORT ANNUAL REPORT REPORTING FRAMEWORKS & STANDARDS DISCLOSURE VEHICLE UK ONS DEFRA OTHER AGENCIES FEDERAL AGENCIES UN NATIONAL ACCOUNT QUESTIONNAIRE DISCLOSURE FORMAT PDF PDF PDFEXCEL CDP (XBRL) GRI (XBRL) SECURITIES COMMISSIONS UN NAT’L ACCOUNTS AGGREGATED DATABASE DATA REPOSITORIES DATA CONSUMERS NATURAL CAPITAL ACCOUNTING ECOSYSTEM
- 8. NATURAL CAPITAL COALITION PROTOCOL
- 9. INTEGRATING THE NATURAL CAPITAL COALITION PROTOCOL
- 10. PROTOCOLPROTOCOL ENTITIES CDSB GRI SASB “GREEN GDP” “ENVIRONMENTAL PROFIT & LOSS" UN SEEA CDP QUESTIONNAIRE GRI REPORT ANNUAL REPORT REPORTING FRAMEWORKS & STANDARDS DISCLOSURE VEHICLE UK ONS DEFRA OTHER AGENCIES FEDERAL AGENCIES UN NATIONAL ACCOUNT QUESTIONNAIRE DISCLOSURE FORMAT PDF PDF PDFEXCEL CDP (XBRL) GRI (XBRL) SECURITIES COMMISSIONS UN NAT’L ACCOUNTS AGGREGATED DATABASE DATA REPOSITORIES DATA CONSUMERS THE INCA-SDTF PROJECT ICAEW Natural Capital Accounting Structured Data Task Force
- 11. PUMA AND ITS ENVIRONMENTAL PROFIT & LOSS (EP&L) Puma quantifies a range of environmental impacts arising from its supply chain, transport networks, operations and manufacturing, focusing especially on the leather and cotton in its products They measure water use, greenhouse gas emissions, land use and waste Puma believes that by monetizing its impacts it has facilitated better strategic planning and helped identify those areas of the business where management action is most required
- 12. COCA COLA AND NATURAL CAPITAL MATERIAL RISK Coca Cola has a strong focus on water stewardship - water scarcity is a material risk affecting its business model Coca Cola commitment expressed through an ambitious target to replenish as much water as it uses by 2020 Achieving this target requires Coca Cola to quantify the water it replenishes, which it has been able to do with support from third party organizations like The Nature Conservancy
- 13. Natural Capital Accounting Royal Dutch Shell plc, Oil and Gas Authority (OGA) At what level should XBRL Capture Data
- 14. SHELL OIL AND NATURAL CAPITAL
- 15. SHELL OIL AND NATURAL CAPITAL
- 16. OUR CALL TO ACTION OFFER FEEDBACK DURING THE PUBLIC COMMENT PERIOD
- 17. THANK YOU Liv A. Watson Brad J. Monterio Co-chair, ICAEW Natural Capital Accounting Structured Data Task Force (INCA-SDTF) Co-chair, ICAEW Natural Capital Accounting Structured Data Task Force (INCA-SDTF)
Editor's Notes
- Welcome! (liv to set the stage with ICAEW and NCC initiatives to help companies account for natural capital and countries to present more accurate Green GDP) . . . Forming a task force at ICAEW that Liv and Brad co chair to explore a NEW USE CASE for XBRL and APPLYING it to the DOMAIN of NATURAL CAPITAL ACCOUNTING This is a JOURNEY we are starting on. We don’t have the ANSWERS for any specific challenge around Natural Capital. We want to ENGAGE you and hear your IDEAS and CONCERNS around accounting for the impact and value of natural capital So we are looking forward to this INTERACTIVE session
- Set the foundation about what project is about
- So what is NATURAL CAPITAL? It is the combination of renewable and non renewable natural resources like AIR, WATER, MINERALS and PLANTS that when taken collectively, GENERATE SOME BENEFIT to business and society >> THIS CAN BE ACCOUNTED FOR Natural capital is in fact seen as a CRITICAL ASSET, as we will discuss shortly And changes in the FLOWS and IMPACTS of Natural Capital can have a MATERIAL influence on Business or society >> I read some research somewhere that more than half of corporate profits would be impacted (negatively) if companies had to fully account for natural capital on their balance sheets! For those of you familiar with the Integrated Reporting Framework, This is one of the 6 capitals that are integrated into the assessment of a company’s way to create value Natural assets provide a wide range of environmental services that make human life possible: the food we eat, the water we drink and less visible services such as climate regulation and the inspiration we take from wildlife and the natural environment. Office for National Statistics (ONS) and the Department for Environment, Food and Rural Affairs (Defra) have been developing methods to value these services, aiming to highlight the relative importance of services provided by the UK’s natural assets. In 2014, services provided by the environment played a key role in supporting the incomes of certain UK industries; 16% of profits from agricultural production can be attributed to services provided from our natural resources; 37% for public water supply; and 87% for fish production.
- Natural capital ACCOUNTING is the process to measure those stocks and flows of the natural resources. These measurements can be BOTH FINANCIAL and NON FINANCIAL in nature – so for example, a GREENHOUSE GAS EMISSION metric may be in PARTS PER MILLION, or the RISK from a CANTAMINATED WATER SUPPLY could be in the ten or HUNDREDS of MILIONS OF DOLLARS dollars for a beverage manufacturer Office for National Statistics (ONS) and the Department for Environment, Food and Rural Affairs (Defra) have been developing methods to value these services, aiming to highlight the relative importance of services provided by the UK’s natural assets. In 2014, services provided by the environment played a key role in supporting the incomes of certain UK industries; 16% of profits from agricultural production can be attributed to services provided from our natural resources; 37% for public water supply; and 87% for fish production.
- The cool things about this ecosystem is the concept of the “ENVRONMENTAL P&L STATEMENT” for companies measuring the value and impact of natural capital… and the concept of a GREEN CDP to help measure impacts and values statistically at the country level Help move companies to the point that they identify the impacts, measure those impacts, understand how they affect value, and how to manage the risks around them
- SIMILAR TO THE COSO FRAMEWORK IN SOME WAYS in terms of how it is structured and flows
- This protocol is all about integrating natural capital into strategic business decision making, ultimately. But it begins with using the protocol to identify and then measure the organization’s impact and interdependencies on natural capital This is the first step. And one that companies need to spend careful time on. The next step is to determine the VALUE of those impacts and measures – what does it mean for creating value at the organization? What is the relative IMPORTANCE OF NATURAL CAPITAL on the business? HOW USEFUL ARE THE IMPACTS to the business? This is likely where most companies that have acknowledged the role of natural capital have gotten. Getting beyond this level – to actually making decisions that affect the business based on the impacts of natural capital is where companies begin to approach the strategy realm. Taking this all the way through to external disclosures for things like GRI and CDP reports is an emerging growth area. Many companies have committed to do so, but we are far from this being common business practice today. XBR can facilitate the flow of information from the beginning through to the external reports. And we will talk about the project that will explore that in more detail.