What is Corporate Natural Capital Accounting, and how can it help organisations value natural assets at the local and landscape scale? In this blog, Phil Cryle at Economics for the Environment Consultancy (eftec) explains how the approach has been used by Forest Enterprise England and the Duchy of Cornwall, and links to a 30-minute webinar from the Ecosystems Knowledge Network explaining the process in greater depth.
The ‘corporate natural capital accounting’ (CNCA) framework was developed by eftec for the Natural Capital Committee in England. CNCA is akin to a financial balance sheet for natural capital assets, comparing the value of natural capital benefits to the cost of maintaining these benefits. It is particularly suited to land-owning or managing organisations.
This year, the method has been applied for the first time at a large scale, by Forest Enterprise England to the Public Forest Estate (around 254,000 hectares; approximately 1% of England) and the Duchy of Cornwall to its rural estate (around 55,000 hectares). The natural capital accounts developed for these organisations has built on their existing financial accounting and property management systems and data. It has provided a valuable experience about the application of the method, and insights for the organisations that have improved strategic thinking about natural capital and other capitals (e.g. social, physical) including understanding risks and opportunities associated with the management of natural capital and better communication with internal and external stakeholders.
For Forest Enterprise England the account has been the first application of the CNCA framework to cover an organisation’s entire estate. Simon Hodgson, chief executive of Forest Enterprise England, commented: "The CNCA approach enables us to understand and communicate the value of the public forest estate to government and society and to understand how the decisions we make about managing the estate impact on its value over the long term.”
The Duchy of Cornwall’s account was the first natural capital account to be published in an organisation’s annual accounts in the UK. Andrew Phillips, rural finance director for the Duchy, noted: “We have gained a new perspective by comparing natural capital values to the rents and maintenance costs already captured in our financial accounts. These comparisons help organise environmental priorities across different parts of the estate – such as highlighting the wide range of values associated with management of Dartmoor, and for understanding the relative importance of stores, emissions and sequestration of carbon in different parts of the estate.”
These two accounts were discussed by consultants at eftec during a webinar hosted by the Ecosystems Knowledge Network on 6th October 2016.
The Forest Enterprise England account can be found here and the Duchy of Cornwall account here.
The CNCA is one of the tools recommended in the Natural Capital Protocol which was launched in July 2016.
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