Nature is foundational to Australia’s economic growth. The better we protect and restore natural capital, the more productive businesses that depend on nature can be. Improved natural capital management can also improve resilience, reducing risks to productivity from a changing climate.
As organisations strive to become more sustainable and resilient, it's become essential to understand and report on nature-related impacts, risks and dependencies.
CSIRO Nature IQ has been created to help organisations undertake natural capital accounting, as well as natural capital impact, dependency, and risk/opportunity assessments.
Natural Capital Accounting
Natural capital accounting measures and values the stocks of natural assets or ecosystems that an organisation owns or manages, such as forests, farmlands, water catchments or mineral reserves. It seeks to quantify the ecosystem services and associated benefits derived from these assets over time, such as timber, food crops, water provisioning, carbon sequestration and recreation.
By applying accounting principles to nature, organisations can integrate natural capital into their decision-making and reporting alongside traditional financial capital. Maintained natural capital accounts provide metrics around changes in the extent, condition and monetary value of natural assets year-on-year, helping to build an understanding of nature's contributions to the organisation.
Who is natural capital accounting relevant for?
Natural capital accounting is primarily relevant for organisations that own or directly control natural assets and resources.
Key examples include:
- Ecosystem-based industries: Forestry companies, agricultural businesses, mining companies, aquaculture
- Government bodies: Environment/natural resource management agencies
Natural Capital Impact, Dependency, and Risk/Opportunity Assessments
While natural capital accounting focuses on natural capital assets under the organisation's direct control, impact and dependency assessments have a broader perspective and address the organisation's wider interactions with nature.
The assessments measure:
- Impacts: Both positive, such as conservation activities, and negative, such as pollution and habitat destruction, that alter the state of natural capital
- Dependencies: The natural capital inputs, like water or flood protection services, that an organisation relies upon for its operations and value chain
- Risks: Current risks from impacts and dependencies, as well as future risks like those from climate change, resource scarcity or environmental regulations
Impact and dependency assessments are complemented via a risk/opportunity analysis to identify material issues and prioritise responses. This could include environmental management, securing future supply chains or unlocking green revenues.
Who are natural capital impact, dependency and risk assessments relevant for?
With very few exceptions, all organisations have some level of impact on nature and dependence on natural capital. As such, these assessments are valuable for a broad range of organisations and sectors, including:
- Manufacturers, retailers and their supply chains
- Infrastructure, construction and urban development
- Transportation, logistics and utilities
- Financial services, investment management, insurance
- Consultancies and advisory firms
Using CSIRO Nature IQ for reporting
A better understanding of your environmental footprint allows you to get ahead of emerging regulations, increase likelihood for private sector investment, improve your efficient use of natural resources.
Nature IQ supports robust, accurate and comprehensive environmental measurement and reporting. Its biodiversity indicators are derived from advanced machine learning algorithms and high-resolution spatial data, able to provide highly granular and accurate insights.
Its capabilities cater to both natural capital accounting and impact/dependency assessments:
Natural Capital Accounting:
CSIRO Nature IQ's habitat condition, connectivity, and threatened species habitat provision indicators can help you understand the state and value of your natural assets.
This data can be used to inform management decisions, set targets, and track progress over time. Nature IQ provides:
- Integrated data on habitat condition, species, water and carbon accounts
- Projections of future ecosystem service flows from owned/managed assets
- Consistency with financial accounting principles for balance sheets and income statements
Impact, Dependency and Risk Assessments:
CSIRO Nature IQ's indicators can help you identify areas of high biodiversity value, assess the potential impacts of your operations, and prioritise actions to mitigate risks and enhance positive outcomes for nature. Nature IQ provides:
- Metrics that quantify an organisation's impacts like emissions, water use and biodiversity loss
- Measures of dependencies like water provisioning, pollination or flood mitigation services
- Analysis of threats to critical dependencies from climate change and resource scarcity.
With comprehensive natural capital data and analysis consolidated into one platform, Nature IQ is facilitating consistent sustainability practices across the public and private sectors. By adopting both natural capital accounting and assessment, we can be more confident that our economic growth and prosperity are sustainable.