Public and Private approaches to Integrating Natural Capital

The System for Environmental-Economic Accounting (SEEA) and the approach laid out by the Natural Capital Protocol (NCP) each address the same underlying challenge and aspire to similar overarching goals.

Aligning these complementary approaches to improve analysis and reporting of natural capital outcomes is essential for more sustainable decision making, worldwide.

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International organisations, governments, and businesses worldwide are confronted with the challenges of natural resource management in a world of growing demand and limited or declining supply.

Through UN processes, international, national and regional governments and organisations around the world have committed to apply SEEA as the harmonised approach for reporting on environmental stocks and flows and their connections to people and the economy.

Through the Natural Capital Coalition, many leading business have committed to adopt the Natural Capital Protocol as the best practice way to fulfil social responsibilities, assess risks and improve performance in relation to natural capital management.

SEEA’s strength lies in its description of international statistical standards for measurement and reporting of environmental stocks and flows, including ecosystem services and biodiversity, at nested levels of geographical focus, from local to global.

NCP’s strength has been to build awareness and practical understanding of the business imperative to be accountable for and improve natural capital management, and to provide a common process and language for engagement.

Both approaches create potentially valuable opportunities for integration of environmental data into economically driven decision making systems.

Drawing insight from a growing Information Lake

There is a huge opportunity to draw value from the growing “information lake” available to decision makers by using comparable definitions and treatments, and so build a shared understanding about how to drive productive and sustainable outcomes.

SEEA based approaches offer a way to specify, structure, access, compare, analyse and integrate economic and environmental information for all types of analysis and reporting: public or private, anywhere in the world.

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The key point of overlap between SEEA and NCP is the measurement and analysis of information about the environment – much of which is collected and published by public authorities.

A key principle of SEEA is to integrate environmental and economic data at locally defined spatial units. This reflects the fact that environmental-economic outcomes are driven by spatially interdependent factors, and allows for the aggregation of data for analysis at all sorts of larger geographically defined levels (catchment, statistical area, etc.).

Embracing a spatially-based information architecture creates a powerful platform to tie decision making back to local ecosystem outcomes, including those arising through complex supply chains.

Tapping into the wealth of opportunity created by globally shared, locally adaptable environmental-economic information lakes should be a priority for any organisation that aims to improve its natural capital management.

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What is the business opportunity?

Integrating SEEA principles into NCP practices enables businesses to grow and sustain the productivity of their natural capital. It more effectively links management decision making to natural capital outcomes.

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Applying spatially integrated EEA approaches enables all aspects and implications of natural capital management to be understood and assessed through a comparable set of key metrics, indicators and analytical tools.

A key benefit of this approach is to minimise the confusing misalignment between alternative models used for CSR reporting, extended financial reporting or operational management decision making.

For businesses, IDEEA Group can customise spatially integrated EEA accounts to their needs. This enables business decision makers to better understand the drivers of ecosystem outcomes, and link these directly to the assessment and improvement of business performance.