The key findings of this report are:
The report aimed at Chief Financial Officers (CFOs), accountancy professionals and business leaders – as key gatekeepers to corporate strategy, accounting, reporting and disclosure – investigates the concept of materiality and how it is used to identify issues for management and disclosure. The recommendations made in this report are targeted to this key audience.
ACCA (The Association of Chartered Certified Accountants), KPMG and Fauna & Flora International have investigated the concept and existing use of materiality in light of the increasing significance of natural capital as a business risk. The new report entitled: Is natural capital a material issue? An evaluation of the relevance of ecosystem services to accounting professionals and the private sector will be officially launched at a briefing event held in London today.
Natural capital – the stock of capital derived from natural resources such as biological diversity, ecosystems and the services they provide – is in decline globally. The loss of natural capital exposes companies to a range of new risks and opportunities that can impact profit, asset value and cash flow. Civil society is increasingly concerned about the loss of natural capital, but are companies identifying and measuring these issues? When do they become material?
The report explores the current response of the accountancy profession to the increasing importance of natural capital as a business issue. It involved a survey of over 200 accountancy professionals, interviews with CFOs and senior management from 8 major companies, a disclosure survey of corporate reporting by 40 organisations in specific sectors, and desk based research into relevant literature and work in the field.
Key findings of the survey included:
Author of the report Dr Stephanie Hime of KPMG’s Climate Change and Sustainability practice said: “Specific parts of Natural Capital are increasingly being recognised as critical and material business issues. This report aims to bring a new audience into the debate by focusing attention on what the accountancy profession can do to mitigate these risks”.
Head of Sustainability at ACCA, Rachel Jackson said: “ACCA strongly believes that considerations should be made by accountancy bodies to make their members aware of the need to account for natural capital within the company annual reports and accounts, as well as sustainability reports in order to avoid failures when anticipating future risk and their associated costs to business.”
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For more information, please contact:
Lali Sindi, ACCA Newsroom
T: +44 (0) 207 059 5643
M: +44 (0) 7921 698085
Margot Cowhig, KPMG Press Office
T: +44 (0)207 694 4246
M: +44 (0)7920 274856
Available for Comment:
Rachel Jackson, Head of Sustainability, ACCA
Dr Stephanie Hime, Lead Specialist – Biodiversity and Ecosystem Services, KPMG Climate Change and Sustainability Services
Paul Herbertson, Director Environmental Markets Programme, Fauna & Flora International
KPMG Press Office: 020 7694 8773
Notes to Editors
As sustainability and climate change issues move to the top of corporate agendas, KPMG in the UK's Climate Change and Sustainability Services (CC&S) practice assists organisations by providing sustainability and climate change Assurance, Tax and Advisory services to organisations, helping them apply sustainability as a strategic lens to their business operations in order to better understand the complex and evolving environment, optimising their sustainability strategy. For more information, please visit our website:
How to obtain copies of the report:
Is natural capital a material issue? An evaluation of the relevance of ecosystem services to accounting professionals and the private sector executive summary (PDF 3.18 MB).
Full copy of the report (PDF 4.09 MB)
This article represents the views of the author only, and does not necessarily represent the views or professional advice of KPMG in the UK.