Accounting for Nature-Positive: Conceptual Foundations for Identifying Effective Organisation-Level Metrics and Targets
Lead Research Organisation:
University of Birmingham
Department Name: Accounting and Finance
Abstract
If humanity is to realise the vision of the Convention on Biological Diversity, of living in harmony with nature by 2050, then we must act to create a nature-positive economy. Indeed, the draft post-2020 global biodiversity framework, expected to be adopted at the United Nations Biodiversity Conference in Kunming, China in May 2022, articulates a global collective mission to "put biodiversity on a path to recovery by 2030." Defining a clear sense of what nature-positive business can mean in practice is crucial for realising this vision.
Corporate reporting on climate change impacts has galvanised the business community into transitioning towards a net zero carbon economy. Organisations across the globe have been empowered to boldly declare their intentions to become net zero carbon businesses. This is a crucial pillar in addressing climate change. The recently launched Taskforce for Nature-related Financial Disclosures (TNFD) can likewise provide a crucial impetus for transitioning towards a nature-positive economy, driving the business community towards becoming a vital force for nature conservation. But to achieve this, it is essential that businesses can clearly see and understand what it might actually mean for them to become nature-positive.
However, there are fundamental challenges to translating the principles that have been established for disclosing climate-related impacts into the context of nature-related impacts. In many ways, the disclosure of climate-related impacts is conceptually straightforward. A tonne of carbon dioxide has the same effect on climate change regardless of where or how it is emitted into the atmosphere. Therefore, even though there may be technical challenges to overcome regarding measurement, climate-related impacts are ultimately commensurable, meaning they can be reported in quantitative terms and are directly comparable across different organisations.
Conversely, nature-related impacts are not commensurable. Whilst quantitative measurement of such impacts may sometimes be possible, these measurements will rarely be meaningfully comparable across different organisations. This fundamental incommensurability makes accounting for nature-related impacts inherently complex. A central task for TNFD will therefore be to cut through this complexity by articulating a clear set of principles for translating the global aspiration of a nature-positive economy into organisation-level metrics and targets that can drive substantive action on nature conservation.
This fellowship will conduct an interview and document analysis study of the TNFD informal technical expert group, which is a self-selected group of expert stakeholders from NGO, IGO and business-oriented organisations. The aim of this study will be to understand and explain the way this expert group thinks about the meaning of nature-positive business action. This study will facilitate knowledge exchange by acting as a focal point for translating between this expert group and accounting scholarship. This fellowship will thus map the space of possibilities for rendering calculable the idea of nature-positive business, building strong and credible conceptual foundations for establishing effective organisation-level nature-positive metrics and targets.
If the United Nations' mission to put biodiversity on a path to recovery by 2030 is not realised, the consequences for life on this planet will likely be dire. Humanity must transition rapidly to a nature-positive economy. TNFD offers an opportunity to galvanise the business community into making this transition. By enabling businesses to see and understand their place in this transition, this fellowship ultimately seeks to contribute to nature's recovery and restoration.
Corporate reporting on climate change impacts has galvanised the business community into transitioning towards a net zero carbon economy. Organisations across the globe have been empowered to boldly declare their intentions to become net zero carbon businesses. This is a crucial pillar in addressing climate change. The recently launched Taskforce for Nature-related Financial Disclosures (TNFD) can likewise provide a crucial impetus for transitioning towards a nature-positive economy, driving the business community towards becoming a vital force for nature conservation. But to achieve this, it is essential that businesses can clearly see and understand what it might actually mean for them to become nature-positive.
However, there are fundamental challenges to translating the principles that have been established for disclosing climate-related impacts into the context of nature-related impacts. In many ways, the disclosure of climate-related impacts is conceptually straightforward. A tonne of carbon dioxide has the same effect on climate change regardless of where or how it is emitted into the atmosphere. Therefore, even though there may be technical challenges to overcome regarding measurement, climate-related impacts are ultimately commensurable, meaning they can be reported in quantitative terms and are directly comparable across different organisations.
Conversely, nature-related impacts are not commensurable. Whilst quantitative measurement of such impacts may sometimes be possible, these measurements will rarely be meaningfully comparable across different organisations. This fundamental incommensurability makes accounting for nature-related impacts inherently complex. A central task for TNFD will therefore be to cut through this complexity by articulating a clear set of principles for translating the global aspiration of a nature-positive economy into organisation-level metrics and targets that can drive substantive action on nature conservation.
This fellowship will conduct an interview and document analysis study of the TNFD informal technical expert group, which is a self-selected group of expert stakeholders from NGO, IGO and business-oriented organisations. The aim of this study will be to understand and explain the way this expert group thinks about the meaning of nature-positive business action. This study will facilitate knowledge exchange by acting as a focal point for translating between this expert group and accounting scholarship. This fellowship will thus map the space of possibilities for rendering calculable the idea of nature-positive business, building strong and credible conceptual foundations for establishing effective organisation-level nature-positive metrics and targets.
If the United Nations' mission to put biodiversity on a path to recovery by 2030 is not realised, the consequences for life on this planet will likely be dire. Humanity must transition rapidly to a nature-positive economy. TNFD offers an opportunity to galvanise the business community into making this transition. By enabling businesses to see and understand their place in this transition, this fellowship ultimately seeks to contribute to nature's recovery and restoration.
People |
ORCID iD |
| Thomas Cuckston (Principal Investigator) |
Publications
Cuckston T
(2022)
Book Review: Extinctions: Living and Dying in the Margin of Error
in Progress in Physical Geography: Earth and Environment
Thomas Cuckston
(2022)
Risks of Perverse Outcomes from Accelerating Natural Capital Thinking: A Reflection
| Description | TNFD is a potentially critical evolution in the economisation of nature, addressing socio-ecological complexities of nature and of business-nature relations, to enable financial market investors to recognise their own interests in the systemic risks from nature loss and thus to better align corporate financial imperatives with nature restoration. By advancing a conceptual understanding of nature that includes an ecological dimension alongside the economic, and then using this conceptual understanding as the basis for a supply of location-based information to financial markets about where and how a business interfaces with nature, the TNFD beta framework document imagines a co-evolution of understanding of nature-related risk between investors and managers, shifting corporate financial imperatives such that corporations becomes capable of moving away from exploiting nature and towards restoring nature, contributing to the realisation of a nature-positive future. |
| Exploitation Route | Placing corporate financial imperatives into their socio-ecological context necessitates rendering calculable, firstly, an ecological understanding of nature and, secondly, how corporations interact with nature. Achieving this calculability means addressing the complexities of nature and of business-nature relations respectively. TNFD's respective approaches to addressing these two aspects of socio-ecological complexity open up new spaces of possibility for accounting scholars wishing to contribute towards realising a nature-positive future. In respect of the complexity of nature, the TNFD beta framework document advances a conceptual understanding of nature that includes an ecological dimension alongside the economic, representing the diversity of biomes. The introduction of an ecological dimension to how managers are expected to understand nature opens up numerous questions for scholarly research. Perhaps the most pressing question concerns how managers are able to develop the ecological literacy needed to engage with TNFD and ultimately to become a force for a nature-positive future. How can new ecologically-oriented forms of knowledge be integrated into management systems and processes? How do ecological and economic understandings of nature interact within organisations? What are the business implications and limitations of conceptualising nature in terms of ecological biomes? What are the consequences of standardising the diversity of biomes (using IUCN classifications) for management thinking and decision-making? What are the consequences for nature restoration of excluding other complexities of nature (e.g. species diversity, genetic diversity) from managers' understandings of nature? How can TNFD's conceptual understanding of nature interact with other understandings of nature, such as those of indigenous peoples and local communities? In-depth case studies, interview studies, and ethnographic research could be fruitfully employed to investigate TNFD's envisaged movement towards corporate engagement with ecology. Collaboration and knowledge exchange between accounting scholars and ecologists is also likely to be especially valuable. In respect of the complexity of business-nature relations, the TNFD beta framework document advances a supply of location-based information to financial markets about where and how a business interfaces with ecological biomes. The introduction of location-specificity into how managers are expected to understand their business and its relations with nature opens up numerous further questions for scholarly research. There is an enormous challenge ahead for corporations to map the locations of their operations (including across their entire supply chains) against the locations of ecological biomes, and then to evaluate the impacts and dependences that arise from these interfaces. How can such location-based data be gathered, processed and analysed to build a clear picture of how a business interfaces with nature? How can a location-based understanding of business-nature relations influence management thinking and decision-making? How are organisation-level metrics and targets being devised and implemented to manage business-nature interfaces? How can such metrics and targets influence business models? Crucially, how can TNFD reporting on business-nature interfaces affect managers' understanding of investors' interests, and thus of their corporate financial imperatives? Such questions represent the beginnings of a programme of research aimed at making corporations - and, indeed, accounting scholarship - a force for nature-positive future. |
| Sectors | Education,Environment,Financial Services, and Management Consultancy |
| Description | ICAEW |
| Organisation | The Institute of Chartered Accountants in England and Wales |
| Country | United Kingdom |
| Sector | Private |
| PI Contribution | Fellowship activities revolved around advancing and promoting the nature-positive agenda within accounting academia and practice, facilitating development of a programme of research and engagement on the question of how we can account for a nature-positive future. A key activity in this regard was the development and management of a 2-day knowledge exchange workshop at University of Birmingham in July 2022, run in collaboration with the Institute of Chartered Accountants in England and Wales (ICAEW), entitled "Accounting for Nature-Positive". This event brought together leading academics and professionals to discuss a way forwards for developing accounting in way that can enable nature-positive action. The workshop included keynote speakers from the Taskforce for Nature-related Financial Disclosures (TNFD) and the Institute of Chartered Accountants in England and Wales (ICAEW), as well as academics from accounting, business management, ecology, and sustainability science. Speakers included: ? Laura Clavey, Senior Technical Manager for TNFD ? Prof Carlos Larrinaga, Universidad de Burgos ? Dr Laura Graham, University of Birmingham ? Dr Hendrik Vollmer, University of Warwick ? Prof Stuart Cooper, University of Bristol ? Prof Helen Tregidga, Royal Holloway University of London ? Dr Chris Biehl, Credit Suisse ? Professor Ian Thomson, Lloyds Banking Group Centre for Responsible Business ? Professor Jan Bebbington, Pentland Centre for Sustainability in Business ? Richard Spencer, Director of Sustainability for ICAEW A further one-day workshop in collaboration with ICAEW has since been held at University of Birmingham on 10th February, with further keynote participation of the ICAEW Director of Sustainability and leading academics from the UK and internationally. |
| Collaborator Contribution | The principal engagement work in this fellowship has been the strengthening and deepening of links with the Institute of Chartered Accountants in England and Wales (ICAEW). As a result of this engagement work, ICAEW agreed in principle to collaborate on a landmark Policy Commission to investigate the knowledge base and skillset needed to render the accounting profession into a force for a nature-positive future, and to use this as a basis for collaborating to build an ICAEW Nature Hub for accounting professionals. |
| Impact | 2-day knowledge exchange workshop on Accounting for Nature Positive, 18th-19th July 2022. 1-day knowledge exchange workshop on Accounting for Nature Positive, 10th February 2023. |
| Start Year | 2022 |