Accounting for ecosystem services in the forest sector – Forico, Tasmania

Since 2016, Forico and IDEEA Group have worked together to apply the United Nations System of Environmental-Economic Accounting (SEEA) in the Forico Estate. Phase 1 of the work program explored the feasibility of applying the SEEA framework to the Forico estate, while Phase 2 put the concepts developed during Phase 1 into practice. It is understood that these efforts are the first to employ the UN SEEA principles to account for the environment and ecosystems at the business level.

Completed in September 2018, Phase 2 of the work program involved:

  1. accounting for the stock and condition of ecosystem assets held by Forico
  2. accounting for the flow of ecosystem services supplied by these ecosystem assets
  3. developing a method to integrate this information with financial information

A key outcome of the work was a set of environmental accounts that enable Forico to recognise the value of the ecosystem services that it delivers. Incorporating environmental-economic accounting into standard financial accounting approaches and business processes provides several benefits for Forico including:

  1. improved operational decision-making by using a more complete set of financial accounts;
  2. improved communication to stakeholders through the recognition of a wider range of environmental values; and
  3. improved strategic allocation of financial resources to maximise the flows of ecosystem services.

Additionally, the accounts could be used to report on requirements under the Forest Stewardship Council’s (FSC) newly released FSC National Forest Stewardship Standard for Australia

Combining Forces – Natural Capital Coalition

Natural capital has both private and public dimensions that are reflected in different perceptions, management and decision-making approaches. These differences often lead to overuse and poor management of natural capital – often referred to as the tragedy of the commons – at both global and local scales.

A key feature of the differences between public and private approaches to natural capital concerns the language that is used to describe and discuss the relevant environmental stocks and flows. Central to improving the management of natural capital is having a common language to define, measure and report on it.

There is now an opportunity to combine forces natural capital thinking and assessment, leverage the strength of the support from the public and private sectors for two key approaches, the Natural Capital Protocol (NCP) and the System of Environmental-Economic Accounting (SEEA) and seek to understand the opportunities and synergies of these approaches both with each other and with the wide range of other approaches in this space.

This workshop is one part of a broader program of work to engage widely on the subject of natural capital. The primary objectives are to:

  • Broaden the understanding of the breadth of different approaches to natural capital
  • Establish the benefits that might be obtained from combining forces on natural capital
  • Identify the barriers to combining private and public sector approaches to natural capital thinking and assessment
  • Identify opportunities and activities that can be undertaken in the short to medium term to overcome those barriers and demonstrate the benefits of combining forces to both the public and private sector.

Workshop participants are encouraged to visit the Natural Capital Coalition’s Combining Forces page for additional background and resources, especially concerning the potential linkages between NCP and SEEA.

Forest Industry (Forico) leading the way in ecosystem accounting

Last week global forestry giant New Forest published their fifth annual Sustainability Report. It features work done by IDEEA Group with New Forest subsidiary Forico to account for the stocks and changes in ecosystem assets and to quantify and value the flow of ecosystem services provided by these assets (see p 21).

While this is probably a world first in the forestry sector, it is certainly a sign of things to come. We encourage you to check out the report and share it with others to show how ecosystem services accounting is fast becoming mainstream best practice for primary producers and other environmental asset managers.