On 29 January, we organised a breakfast policy debate on environmental accounting which was kindly hosted by MEP Sirpa Pietikäinen (EPP / Finland).

We discussed how important it is to identify, measure and account for the environmental impact of companies’ economic activities. As part of the EU Green Deal, the European Commission is also looking to support businesses and other stakeholders to develop standardised natural capital accounting practices. Speakers included Thomas Verheye, Principal Advisor for Green Finance & Investment from the European Commission (DG ENV), Rami Feghali Sustainable Finance Group Vice-Chair from Accountancy Europe; and Ravi Abeywardana, ICAEW member.

We need to know through the whole lifecycle of an investment, where the money flows. There is no lack of data. But there is lack of tools how to make sense of this data. #Accounting is the link bridging environmental & financial data. Thank you to @AccountancyEU for the panel. pic.twitter.com/gWwNsUoT0g — Sirpa Pietikäinen (@spietikainen) January 29, 2020

Participants discussed the need to make natural capital accounting and the assessment of natural resources use central to business. Speakers emphasised that the time to start is now. Clearly there is a huge issue with the availability of data, which is the blood of natural capital accounting. Once this data is available, natural capital accounting can become the game changer. We need a universal environmental management system, which includes climate, water, air, land and biodiversity, to evaluate the environmental footprint of a company. Once that is in place, the work can begin to put these results on a par with financial results. From a business standpoint, if management doesn’t have the numbers on natural capital use, they can’t manage the business.

Following the debate speakers expressed enthusiastic support to continue the discussion and pursue concrete action on creating the universal parameters for natural capital accounting.