• Natural Capital Declaration
  • Natural Capital Declaration
  • Natural Capital Declaration
  • Natural Capital Declaration
  • Natural Capital Declaration
  • Natural Capital Declaration

Working Group III: Accounting for natural capital


This working group aims to build capacity for financial institutions to meet the NCD commitment to “Work towards building a global consensus for the integration of natural capital into private sector accounting and decision-making, supporting, when appropriate, the related work of the TEEB for Business Coalition, and other stakeholders.”


Chair: Rosemary Bissett, National Australia Bank
Vice-Chair Namita Vikas, Yes Bank


Project Manager: Susan Staples, KPMG Australia


Working Group members (as of July 2015):
Signatories (financial institutions)
ASN Bank
FMO (observer)
Kenya Commercial Bank
National Australia Bank
Yes Bank


Supporters (non-financial institutions)
(Prince of Wales) Accounting for Sustainability (A4S)
ACCA (Association of Chartered Certified Accountants)
Climate Disclosure Standards Board
Convention on Biological Diversity (CBD)
DG Environment, European Commission
Fauna and Flora International
Forum for the Future
Global Footprint Network
Global Reporting Initiative
ICAEW (Institute of Chartered Accountants in England and Wales)
International Institute for Sustainable Development (IISD)
Natural Capital Coalition
True Price
VBDO (Dutch Social Investment Forum)
World Business Council for Sustainable Development (WBCSD)
Amigos de Terra Brazil


NCD Signatories and Supporters agreed a plan for WG3 to develop Financial Sector Guidance on accounting and valuation related to the impacts, benefits and dependencies on natural capital at a portfolio level. The NCD and Natural Capital Coalition have an MOU to collaborate on the development of the guidance as a supplement the Natural Capital Protocol for the corporate sector.

Working Group 3 has two work streams:

Work stream 1 – development of a Natural Capital Accounting (NCA) Guidance for the Financial Sector

The guidance aims to help financial institutions take risks and opportunities associated with natural assets into account in key financial instruments. Applications of accounting methodologies for banks and investors could include developing financial instruments with net positive impacts on natural capital or integrating corporate assets and liabilities related to biodiversity & ecosystem goods & services into financial analysis. This work stream also include pilot testing of the protocol with volunteer WG3 member organisations.

Financial institutions interested in finding out more about this work stream can contact Anders Nordheim, UNEP FI, at anders.nordheim@unep.org

Current projects

1. Advancing natural capital accounting
The NCD is currently working with KPMG Australia to develop a working paper with a draft framework to link externalities from natural capital impacts and dependencies in two region-sectors – land use change from cattle ranching and farming in Brazil and air pollution from coal-fired power generation in the United States. These are two of the 10 region-sectors identified as externality-heavy in the study Natural Capital at Risk: The top 100 externalities of business (Trucost, April 2013) . The study recommends that investors build natural capital risks into asset appraisal and portfolio risk models. To support this, financial institutions need guidance on how to account for natural capital risks linked to clients and investee companies.


The paper will provide case studies illustrating how natural capital exposures are currently being internalised across the selected sectors (cattle ranching and farming in Brazil and coal-fired power generation in North America). The draft framework will help develop an approach to link external costs with the primary sources of financing to identify common principles and approaches to differentiate accountability between various financial products and services across the two sectors. The high-level framework is a first step to support accounting for natural capital within lending and investment portfolios. The paper will inform the development of the NCD Financial Sector Guidance.

This project is commissioned by UNEP TEEB

Work stream 2 – Application and testing of sector-specific valuation and accounting methodologies by financial institutions

This could include projects such as those that consider the application of natural capital valuations to individual assets in an FI’s loan book, and the implications for FIs for portfolio level analysis of risk and return in specific sectors. Projects in this stream are proposed by WG3 members.
Projects in the pipeline

Proposed: Linking biodiversity and ecosystem indicators to productivity, business resilience and financial performance in the Food products and agricultural value chain

This proposed project aims to develop approaches and/or methodologies to assist in the integration of valuation and accounting of best practice biodiversity and ecosystem services management and associated benefits (e.g. resilience, productivity improvements, and profitability) in the Food Products Global Industry Classification Standard (GICS) industry and value chain for enhanced credit risk assessment. Evaluation of agri-sector and food processing impacts and dependencies can help identify core key issues for consideration. The aim of this project is to recognize the benefits of good management of natural assets in achieving agricultural productivity and resilience. The project is currently in the scoping phase.
Financial institutions interested in finding out more about this project can contact NCD Programme Manager Marie Morice at m.morice@globalcanopy.org