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Reporting to investors on natural capital is vital to demonstrate management of, and impact on, scarce resources


11 Jun 2014


Euro & Finance

As business impacts and dependencies on natural capital reach a critical point, a new report launched today by ACCA (the Association of Chartered Certified Accountants), Fauna & Flora International (FFI) and KPMG calls for robust reporting on the management and use of key commodities including commitments to reduce impacts on natural capital

The report, Business and investors: providers and users of natural capital disclosure reviewed published information from companies with an intensive use of five key commodities with a high impact on natural capital: beef, cotton, palm oil, soya and sugar. The use of these commodities is a critical sustainability challenge and the report discusses many examples of the approaches taken to disclosure by significant users of these commodities. Standard practices revealed by these companies include: supplier certification, supplier audits, membership to industry wide sustainability initiatives and monitoring and traceability activities.

The report demonstrates a clear link between an organisation’s strategy for managing its use of these commodities and the extent to which it impacts on the natural world. The unsustainable use of natural capital can create or exacerbate corporate risk and is becoming increasingly important to investors.

Outside a small leading group the majority of companies are not reporting on natural capital impacts and dependencies. This leaves investors struggling to assess natural capital risks and opportunities

Rachel Jackson, ACCA’s head of sustainability, said: “Businesses are beginning to measure their impacts on natural capital, and accountants need to understand the pivotal role they should have in accounting and reporting for it accordingly. This, in turn, will not only help reverse the unsustainable use of natural capital caused by companies, but also provide more complete information required by the investors.”

Zoe Balmforth, FFI’s Senior Technical Specialist, Business & Biodiversity, said: “If we continue to draw down on natural capital, we risk irreversible degradation of the ecosystems that provide goods and services on which we – both society and business - rely on. By managing natural capital sustainably, companies can help to ensure these goods and services are available to them, and to all of society, for the long term. They can also mitigate their own business risks – for example from disruptions to supply chains and operations, future changes to legislation and the impacts of reputation.”

Vincent Neate, head of sustainability services at KPMG said: Transparency on value at risk between managers and investors is critical grist in the mill of capital markets. Leading companies are making their own lives easier by demonstrating the security of their commodity sourcing to investors. I hope this report encourages others to follow suit.”

To read the Business and investors: providers and users of natural capital disclosure paper, visit

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For more information, please contact

Alana Sinnen, ACCA Newsroom

+ 44 (0) 207 059 5807

+44 (0) 7715 812120

Notes to Editors

1.      For a full copy of the briefing paper Identifying natural capital risk and materiality, released in 2013, click here.

2.      For a full copy of the 2012 report Is natural capital a material issue? An evaluation of the relevance of biodiversity and ecosystem services to accountancy and the private sector, click here.

3.      Natural Capital is the stock of capital derived from natural resources such as biological diversity and ecosystems along with geological resources such as fossil fuels and mineral deposits. It provides the ecosystem products and services that underpin our economy and inputs or indirect benefits to business. This report focuses on biodiversity and ecosystems, specific constituents of natural capital that give rise to ecosystem services. Geological resources are not considered as they are routinely included in market transactions and accounting practices. 

4.      Materiality is a concept that recognises that information, if omitted or misstated, can influence the assessments of the users of corporate reports. It defines the point at which information becomes relevant to report users. For example, the Global Reporting Initiative G4 Reporting Guidelines state: “Relevant topics are those that may reasonably be considered important for reflecting the organisation’s economic, environmental and social impacts, or influencing the decisions of stakeholders, and, therefore, potentially merit inclusion [in reporting].”

About ACCA (
ACCA (the Association of Chartered Certified Accountants) is the global body for professional accountants. We aim to offer business-relevant, first-choice qualifications to people of application, ability and ambition around the world who seek a rewarding career in accountancy, finance and management. We support our 162,000 members and 428,000 students in 173 countries, helping them to develop successful careers in accounting and business, with the skills required by employers. We work through a network of 91 offices and centres and more than 8,500 Approved Employers worldwide, who provide high standards of employee learning and development. Through our public interest remit, we promote appropriate regulation of accounting and conduct relevant research to ensure accountancy continues to grow in reputation and influence.

About Fauna & Flora International (

Fauna & Flora International (FFI) protects threatened species and ecosystems worldwide, choosing solutions that are sustainable, on the basis of sound science and taking account of human needs. Operating in more than 40 countries worldwide - mainly in the developing world - FFI saves species from extinction and habitats from destruction, while improving the livelihoods of local people. Founded in 1903, FFI is the world’s longest-established international conservation body and a registered charity. Through its global corporate partnerships, within the Business & Biodiversity Programme, FFI aspires to create an environment where business has a long-term positive impact on biodiversity conservation. FFI leads the Natural Value Initiative (NVI) collaboration ( To date, the NVI has released a series of valuable publications and tools that address biodiversity and ecosystem services within the finance, extractive, pharmaceutical, and agricultural sectors.

About KPMG (

KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and operates from 22 offices across the UK with approximately 11,500 partners and staff.  The UK firm recorded a turnover of £1.8 billion in the year ended September 2013. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 155 countries and has 155,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity.  Each KPMG firm is a legally distinct and separate entity and describes itself as such.