When Christchurch-based Lyttelton Port Company (LPC) signed up to be an early adopter to report on nature-related issues, it started a process that would take it back to the origins of the organisation, examining the impact the business has had, and will continue to have, on nature.

It was an endeavour that involved assessing how port activities have influenced local ecosystems over time and identifying areas for improvement. The project demonstrates the growing awareness that nature is intrinsically tied to the value of a business, and underpins long-term resilience and profitability.

Last year, LPC became the first New Zealand company to complete a Taskforce on Nature-related Financial Disclosures (TFND) report. It was a decision made with the aim of determining material risks, as well as opportunities, in terms of the potential financial impact on LPC’s business, say Howard Gant CA and Kirsty Brennan from the LPC risk and assurance, and environment and sustainability teams respectively.

“LPC’s dependencies on nature were evaluated as direct capital or operational costs or indirect, through the risk of legal costs, fines or increased cost of consent compliance,” Gant says.

“We workshopped with representatives from across all business units and listed all foreseeable risks relating to nature for LPC’s direct operations, then categorised a list of the top 10 most financially material [directly or indirectly] to LPC.”

Located on the northern shore of Lyttelton Harbour in the South Island, LPC serves as the primary maritime gateway for the Canterbury region. Its operations include using natural resources, such as raw materials for operations and assets, as well as activities like dredging, seabed and shoreline reclamation, discharging pollutants into the air, land and water, and using land for the organisation’s activities, which all have varying impacts on nature.

Brennan says that while LPC has been a committed partner under the Whaka-Ora Healthy Harbour catchment management plan since 2015, using the TFND framework to make the connection between the financial implications of nature-related risks also allowed the business to start quantifying the positive actions it was taking to minimise impacts and risks relating to nature loss.

“We have mapped the extent of our activities and the habitats they overlap with,” she says, “and one thing we are really proud of is that our baseline for assessing our impacts is right from the early origins of the port in 1875.

“By understanding our nature-related impacts, we are better equipped to develop a comprehensive biodiversity roadmap for the next five years, to shift LPC’s impact trajectory within LPC’s operational areas and areas of influence from net negative towards net positive. The roadmap will help inform the allocation of additional resources towards nature-positive initiatives and to drive actions that can be measured,” she says.

“If we all agree that nature provides services to us, then it’s the definition of an asset and we should be tracking those assets.”

Framing nature as asset

While adopting nature-positive strategies is not yet mandatory, an increasing number of organisations are recognising the value in understanding their nature-related risks and opportunities. This awareness enables better-informed business decisions that align with long-term sustainability goals.

LPC is just one of the many companies that is starting to see the benefits of incorporating the value of natural capital into financial frameworks. And, as the financial implications of nature become more recognised, accountants are increasingly required to play a significant role in the process.

By framing natural capital as an asset that needs to be protected and maintained, much like financial and physical assets, accountants can better understand their critical role in preserving these resources, says Rayne van den Berg FCA, chief value officer of Value Australia, a Capitals Coalition regional hub. She explains: “As accountants, our role is about protecting and creating values. We need to work out what value means and it’s not just financial value, but also the factors that impact financial value.

“If we all agree that nature provides services to us, then it’s the definition of an asset and we should be tracking those assets to make sure a business is still viable. It’s not just about short-term profits. It’s actually about keeping balance sheets healthy over the long term,” she says.

According to PwC research over half the world’s GDP (US$58 trillion) is highly or moderately dependent on nature, but less than 1% of companies know how much their operations depend on nature.

It’s a situation that caused Frank Elderson, member of the executive board at Central European Bank to comment on nature-positive accounting: “This is not some kind of a flower power, tree-hugging exercise. This is core economics. This is core financial stability, core macroprudential, core price stability.”

Every organisation depends on nature in some way, whether through supply chains, land use or resource consumption, says Karen McWilliams FCA, CA ANZ sustainability and business reform leader.

“Addressing nature loss is a key part of solving climate change. But measuring and managing an organisation’s impacts and dependencies on nature is more complex than measuring greenhouse gas emissions, as it is highly location specific and involves multiple factors like water, biodiversity and land use change,” she says.

For LPC, that became apparent once the business had assessed the risks, says Brennan.

“It really helped us define what those nature-related risks were and what we needed to do to manage them. For example, Cyclone Gabrielle, which hit the North Coast of New Zealand in 2023, resulted in a three-month extension to a six-month dredging program due to storms from the east, which led to the removal of an additional 30% of material from the channel, significantly increasing operational costs.

“This event demonstrates LPC’s dependence on nature for storm mitigation and sediment retention,” she says.

Different approaches

The BHP Beenup Site Pilot Case Study is another example of how organisations are beginning to look at ways to incorporate natural capital accounting (NCA) into its operations.

This pilot project focuses on the rehabilitated Beenup Mineral Sands site in southern Western Australia, aiming to assess and enhance the environmental outcomes of mining activities. The approach involved compiling information on the extent and condition of natural assets at the site, which then helped identify the potential to contribute towards nature-positive outcomes during and after rehabilitation activities.

For example, the use of NCA identified 251 plant species that could be restored after mining and restored 15 ecological communities. A further 153 hectares of an ecologically threatened community was able to be protected too.

While the Beenup pilot focuses on ecological recovery and stakeholder engagement post-mining, Tasmanian forestry company Forico’s groundbreaking Natural Capital Report emphasises the economic valuation of ecosystem services in sustainable forestry.

CFO Chris Oddie CA says the shift to viewing natural capital as an asset class has resulted in the business model and investor base moving to align with this perspective, which the company sees as a differentiator and investment opportunity.

“Investors are now emphasising the importance of natural capital, prompting accountants to consider its implications on balance sheets,” says Oddie.

It is also deeply connected to stakeholder sentiment and a commitment from the company to continue to responsibly manage the land, he adds.

“We are the largest private landholder in Tasmania and half of that is sustainable plantation forestry. But a significant proportion of the land we own and manage is in its natural state and is part of our sustainably managed natural capital asset.

“What we do with it, how we manage it, is for the future benefit, not only for our investors, because they see a value for that, but also for the communities we work beside,” he says.

Environmental accountant Cathie Bates CA has been involved in Forico’s natural capital reporting since 2020 and says that the reporting process has evolved over this time to use more granular and verifiable data, moving away from industry benchmarks or proxies.

“In 2023, we released the world’s first integrated TCFD and TNFD report to illustrate the risks and opportunities associated with climate and nature,” says Bates. “Reporting on nature and climate is in the wheelhouse of accountants and requires analysis of non-financial datasets alongside the financials,” she says.

“This is connecting nature with operations and understanding that the business decisions we make have real and tangible impacts. Reporting on nature, and understanding and responding to these impacts and risks, ensures business viability into the future.”

Why natural capital matters in any industry

While mining and forestry have direct interactions with nature, for many other industries measuring dependencies and impacts on nature is less straightforward.

The complexity lies in identifying meaningful data, understanding complex ecosystem relationships and applying appropriate valuation methods to reflect nature’s role in business operations is challenging, says McWilliams.

“The key difference with nature is that we don’t have a standardised measurement. There are many different aspects to consider – water being one, biodiversity another – and then we look at things like land use change, among others. Nature is made up of many facets, each with its own unique impact.

“What makes it even more complex is that each of these factors carries a different level of significance, depending on the location. This makes it much more nuanced and challenging for businesses to fully understand and assess their impact,” she says.

For CAs looking for guidance on natural capital reporting, there are several new tools available to help, including a guide called Why Nature Matters to Accountants, produced by the Global Accounting Alliance, with input from CA ANZ.

“We’ve helped develop this guide, so people can get started,” says McWilliams. “The key message is that you don’t have to do everything and do everything perfectly at the beginning. Just getting started and moving it forward is actually a positive thing.”

How CAs can help measure and value natural capital

A 2025 guide, Why Nature Matters to Accountants outlines the role you can play in measuring natural capital at every stage of your career.