Decluttering the natural capital space

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Decluttering the natural capital space

Once you get started in the natural capital space, you’ll find that there are dozens of frameworks, initiatives, projects, methods, tools, datasets and the like that all seem relevant. And annoyingly, each of these has its own acronym that, at first glance, means absolutely nothing.

In partnership with NRM Regions Australia, we wrote a handy guide to the ‘blizzard of acronyms,’ placing them in context. In general, most are not competing, and will play a distinct role in the natural capital accounting space.

We’ve identified four groups, each recognising a different area:

frameworks and standards establish what should be measured
methods present how organisations can collect and transform data to derive accounting outputs, such as a set of environmental accounts
tools and data platforms allow organisations to collate data from multiple sources and for methods to be applied
initiatives and applications provide the motivation for measurement and the link to decision making.

Getting to know the landscape

Frameworks and standards

For determining what to measure.

Integrated Reporting (IR), ESG, Ecological Balance Sheet, International Financial Reporting Standards Foundation (IFRS), Natural Capital Protocol (NCP), Wealth Accounting.
A key feature of natural capital accounting is the use of consistent concepts and definitions so that the results of measurement can be compared over time and across locations.
Different natural capital frameworks and standards have emerged because different groups of people are interested in answering related but different questions.
Underpinning all frameworks and standards is the need to describe natural capital and its systemic connection to people and business.
The leading framework is the international statistical standard for natural capital accounting – the United Nations System of Environmental-Economic Accounting (SEEA).

Methods

For collecting and transforming data.

To implement the concepts and definitions described in a framework or standard, it is necessary to collect and transform observed data, for example water quality, species count, vegetation type, livestock numbers and soil type, into estimates that can be entered into accounts.
Examples methods for ecosystem condition: Victoria’s Habitat Hectares, NSW’s Biodiversity Assessment Method, Accounting for Nature (AfN), Queensland’s State-wide Indicators Framework (SWIF), Tasmanian Land Conservancy’s WildTracker.
Examples for ecosystem services: Australian Water Balance model (AWBM), SWAT models, the modified RUSLE ; FullCAM and BlueCAM; PERFECT (crops); 3PG (timber)

Tools and data platforms

For organising data and accounting outputs:

QGIS and ArcGIS
FLINTpro
InVEST
Data4Nature
ARIES for SEEA
NSW Government’s SEED platform
Queensland Government’s GLOBE platform

Initiatives and applications

For connecting accounts to decisions.

Initiatives and applications are the entry point to discussions on accounting for natural capital and hence can be readily confused with the various frameworks, methods and tools.

A key consideration in connecting accounts to decision making is fitness for purpose. Thus, when determining what is relevant in your context, you will need to balance the type of question you are wanting to answer, the scale at which you are thinking (farm, region, state), the level of resources available for data collection and account compilation. In short, not every question will require the finest level of detailed data across every aspect of natural capital. In addition, by using a natural capital framing, it will be possible to progressively build richer natural capital accounts that cater to answering a broader range of questions.

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