- CA ANZ members believe accountants have a role to play in helping organisations become nature positive.
- Accountants can translate information for stakeholders, and should consider all nature impacts – not just the ones that are easy to report on.
- Due out in September 2023, the TNFD framework is expected to provide a clear understanding of what it means to be nature positive.
Earlier this year, chief executives from the world’s 10 largest accounting institutes – including Chartered Accountants Australia and New Zealand – called on accountants to help organisations protect and restore natural resources. Working together as part of the Global Accounting Alliance (GAA), the leaders signed a call to action – ‘Nature is Everyone’s Business’ – to signal the important role the profession plays in this crisis.
There is clear support for the initiative among CA ANZ members, with a recent survey showing nearly 80 per cent of members believe accountants have a role to play in supporting businesses around nature-related risks and opportunities.
Furthermore, according to the Taskforce on Nature-related Financial Disclosures (TNFD), more than half of the world’s economic output (around US$44 trillion) is dependent on nature. TNFD’s ambition is for organisations to shift from producing nature-negative outcomes toward nature-positive ones.
But how do you measure and report on these outcomes?
That was one question considered by panelists during CA ANZ’s recent webcast ‘Accounting and Nature: Unpacking how Chartered Accountants support businesses to protect and restore nature’, hosted by CA ANZ on 1 December.
Facilitated by Pollination managing director Zoe Whitton, the panel comprised Rayne van den Berg FCA, chief financial officer of Forico; Kieran Power, director – Climate and Nature Positive at Deloitte Australia; Charles Rau FCA, partner at BDO Gisborne; and Darren Beatty CA, group head chief financial officer of Te Rūnanga o Ngāi Tahu.
The need for nature capital reporting
Tasmanian forestry manager Forico is one of a small group of global companies to have published its own nature capital report. To start this pioneering process, Forico focused on matters material to its business, says Van den Berg.
“The big stuff is carbon sequestration, emissions, habitat provisioning and water quality and flows. That’s what we started to measure and model to understand where we were,” she says.
“There was data our organisation was already collecting for a different purpose, so we started there.”
Van den Berg says organisations urgently need to kickstart their nature reporting, rather than wait around for perfect data or capability scenarios.
“Go and talk to people in the business and work out where your gaps are. Find a metric you can measure over time that gives people making decisions the information they need,” she says. “As long as the data is robust and timely enough, we should get on with it and it will refine over time as we build up capability.”
Lack of data a big threat
A more cautious and holistic approach was recommended by Rau, who advises commercial farming and forestry businesses in New Zealand.
“There is a tendency to report what is easy to report. If you focus on only one or two things, it can create imbalances. You’re almost better not to report until you can do it properly,” he says.
“Nature capital involves many attributes. You need to look at the whole-of-environment and its interconnectedness, like the opportunity cost of biodiversity in forestry management.
Pictured: Charles Rau FCA, BDO Gisborne
“Nature capital involves many attributes. You need to look at the whole-of-environment and its interconnectedness, like the opportunity cost of biodiversity in forestry management.”
“Lack of data is our biggest threat. Sometimes we need to rely on the opinions of experts and not use the excuse that we can’t get the numbers for it.”
Beatty also believes accountants should not be shy to lean on experts, to fill data gaps.
“Accountants are good at collecting and analysing data, but we’re not as strong at collecting qualitative narrative from individuals about how the work we are doing is impacting them. That’s a different skill set,” he says.
"We shouldn’t be afraid to bring in evaluators to support us and help us translate narrative into information we can use to make better decisions and hold ourselves to account.
“Frameworks from the TNFD, TCFD [Task Force on Climate-related Financial Disclosures] and XRB [External Reporting Board] help by providing structure CFOs can get behind and drive through an organisation.”
The need for frameworks
The final version of the TNFD’s framework is expected to be published in September 2023. Power is involved in the framework’s development, and says the TNFD and the International Sustainability Standards Board (ISSB) will help clear the currently muddy waters.
“Frameworks … are key mechanisms for establishing clear taxonomies and ensuring we are precise about what we mean when we say ‘nature positive’,” he says. “We are currently at a risky time where that’s not bedded down.”
Power says the intent is for the TNFD and the TCFD to be unified, removing any overlaps between the two.
“We desperately need accountants who are invested in upskilling, who can work with ecologists and do the translational work. It’s about creating an ecosystem to work with the data out there and the data that is growing.”
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