Natural Capital Accounting
for investing in what matters most
Contents
Foreword
Nat Cap Statements
TM
Thinking Differently About Nature
Investing in What Matters Most
Meaningful Disclosure with TNFD
Natural Capital Accounting with eftec
Contact & More
Foreword
We depend on nature. Unfortunately, most of us forget about this when making business and policy decisions. Environmental economists work to ensure we have better memories: we combine scientific evidence with economic analysis to make nature's invisible values visible. We show an organisation's impacts and dependencies on nature and how financially material nature is for the organisation. This brochure is about one particular way of doing this: natural capital accounting. Natural capital accounting will help you to:
- think differently about nature
- identify how to invest in what matters most
- monitor and disclose for nature markets and initiatives such as TNFD
For details on how to work with us to prepare your natural capital account, see here or contact us for more information
Contents
Foreword
Nat Cap Statements
TM
Thinking Differently About Nature
Investing in What Matters Most
Meaningful Disclosure with TNFD
Natural Capital Accounting with eftec
Contact & More
NatCap Statements
TM
Natural capital accounting is a systematic way of collating and analysing environmental, financial, and socio-economic information. It uses the familiar and effective formats from financial accounting, with some necessary revisions: Natural Capital Balance Sheet This shows the value of the natural capital assets and liabilities of the organisation. Both the asset values and liabilities are projected over a relevant future period. Asset values include benefits derived from nature, for both the organisation and the rest of society. Liabilities are the costs the organisation does, or plans to, incur to produce those benefits or to maintain the stock of natural capital assets. Natural Capital Income Statement This shows the positive and negative changes due to the activities of the organisation during a given financial year. Changes that affect both the organisation and the rest of the society are shown. Both aim to show monetary values as much as possible but could also contain non-monetary information. Notes are prepared to show data sources and assumptions.
NatCap Statements
TM
for impacts & dependencies such as:
for impacts & dependencies such as:
- GHGs
- Air pollution
- Water use & pollution
- Impacts on land
- revenue from extraction
- Food, timber & goods
- Changing carbon stores, water, biodiversity
- Accumulated emissions
- Cost of production and maintenance
Aligned to BSI 8632 & ISO 14054
Inputs to nature market reporting & TNFD, CSRD disclosures
Contents
Foreword
Nat Cap Statements
TM
Thinking Differently About Nature
Investing in What Matters Most
Meaningful Disclosure with TNFD
Natural Capital Accounting with eftec
Contact & More
Thinking Differently About Nature
Natural capital accounting focuses decision makers' attention on the stocks of natural capital that underpin the flows, benefits, and value creation.
Benefits to business and society
Value
Stocks
Natural Capital
Flows
Ecosystem servicesAbiotic Services
This can answer the ultimate sustainability question: are we maintaining the stock of natural capital sufficiently for it to continue to provide us with flows of benefits and value?
Natural Capital Accounting helps organisations think differently about nature:
Watch eftec CEO, Ece Ozdemiroglu, explain in this short video
To see nature as an asset, not just a risk
To classifiy spending on nature as an investment, not an expenditure
To understand how nature is financially material
Or continue to see how natural capital accounting supports investment
To use the info for scenario testing, like in management accounting
To become high integrity buyers and sellers in nature markets and to disclose
Contents
Foreword
Nat Cap Statements
TM
Thinking Differently About Nature
Investing in What Matters Most
Meaningful Disclosure with TNFD
Natural Capital Accounting with eftec
Contact & More
Investing in what matters most
invest in what matters most
Natural Capital Accounting helps you identify investments that are ecologically appropriate, economically beneficial, financeable, and socially & politically aligned...
Economically beneficial
Ecologically appropriate
Socially & Policy aligned
... and after investing, it helps you with continued monitoring of the natural asset, as well as with disclosure through frameworks such as the Taskforce on Nature-Related Financial Disclosures (TNFD)
Financeable
Monitor & Disclose
Investing in what matters most in Hampshire:
Ecologically Approppriate
Economically Beneficial
Defra's ELMs test & trial: land management & finance opportunities
Baseline values from nature at over £660million/year
Socially & Policy Aligned
Financeable
See the full case study on our website
- Landholder Consultations
- Baseline benefits
- Developed pilot land use mapping tool
- Review of national and local policies
Emerging
Available
Contents
Foreword
Nat Cap Statements
TM
Thinking Differently About Nature
Investing in What Matters Most
Meaningful Disclosure with TNFD
Natural Capital Accounting with eftec
Contact & More
Natural capital accounting for TNFD
An organisation that has prepared a natural capital account will find it easier to adopt TNFD
- Accounting is the starting point for much of the information needed for TNFD
this natural capital account has made it easier to decide to adopt and know how to adopt TNFD United Utilities
- Accounting requires coordinating input from many parts of the organisation, as does TNFD reporting
- Accounting helps link the metrics and analysis through the LEAP approach to financial materiality of nature related risks & opportunies
- The materiality exercise used in accounting can be leveraged for TNFD by showing both nature and financial materiality
- The focus of accounting on the extent and condition of the natural capital stock helps set strategy and targets for managing chronic impacts and dependencies holistically instead of piecemeal fixes of acute risks
TNFD's LEAP approach
is supported at each stage
by NatCap StatementsTM
LOCATE
Natural Capital Asset Register
Location productionmetrics
The interface with nature
Ecosystem integrity
Other corporate data
Biodiversity importance
Physical water risks
Physical & Monetary Flow Accounts Materiality Assessment
EVALUATE
Dependencies & Impact Metrics
Dependencies & impacts
Ecosystem services
Impact drivers
State of nature
ASSESS
Risk & Opportunities Metrics
Natural Capital Risk Register
Physical risks
Systemic risks
Transition risks
Risks & Opportunities
Natural Capital Balance Sheet
Opportunites
PREPARE
Materiality Assessment, Asset Values Production & Maintainance Costs
Response metrics
Risk management
Capital Allocation
To respond & report
Strategy
Governance
When it's time to disclose with TNFD, having a natural capital account will support you
Using the data from the Natural Capital Account
Interpreting Natural Capital Accounts & scenario analysis
United Utilities Natural Capital Journey
Refreshed Materiality Assessment for TNFD, TCFD, and ISSB Disclosure
First Corporate Natural Capital Account
Sustainable Catchment Management Programme
Corporate Natural Capital Account
North West Baseline Account
2023
2005
2018
2015
2019
2021
2022
2024
Natural Capital North West Governance Group
Catchment Systems Thinking (CaST)
Integrated Catchment Approach
UU become a TNFD Early Adopter
Adapted from United Utilities' Corporate Natural Capital Account (2024) & Unitied Utilities' Sustainability Report (2024)
United Utilities Natural Capital Balance Sheet
56,000 hectares of mountain, moorlands, heath and grassland across the North-West of England
Net natural capital asset value (asset value – liabilities) of £4.5 billion over 60 years
- How can the results be used?
- Latest NCA will feed into their TNFD disclosure
- Support integration with other management frameworks (e.g., 6 capitals framework and catchment systems thinking)
- Help identify opportunities and manage synergies and trade-offs between different benefits
Contents
Foreword
Nat Cap Statements
TM
Thinking Differently About Nature
Investing in What Matters Most
Meaningful Disclosure with TNFD
Natural Capital Accounting with eftec
Contact & More
Preparing accounts
We collate data across the organisation & external sources to prepare your natural capital accounts
Natural Capital Accounting with eftec
Auditing
Coaching
Using our bespoke checklist, we audit the alignment of your account with the British Standard on Natural Capital Accounting for Organisations (BSI 8632:2021)
We coach your team to set up the accounting system, prepare your natural capital accounts, and compare changes across years
Our process is flexible
Good practice at eftec means:
- Make the most of available information
- Measure material impacts and dependencies
- Speak to different stakeholders
- Prepare transparent methodology, assumptions, calculations
- Ensure the results are comparable across space and time
- So that the work can be audited by third parties
Our portfolio
We started with preparing national accounts for the UK, UK Overseas Territories, and research for organisations like European Commission and European Investment Bank, ISO and BSI.
The leaders in natural capital accounting are organisations and investors closer to land, water, and the sea: those who are more aware of their impacts and dependencies on nature and familiar with long term and/or asset management planning. Increasingly, we see more clients in manufacturing and other industries.
Blue chip companies with land-based investments around the world
UK & Ireland Snapshot
Who are our clients?
By land use type/industry
Organisation type
20%
47%
19%
14%
Why do our clients commission natural capital accounts?
- to understand and manage impacts & dependencies on nature
Reasons for conducting a natural capital account
- to decide on which natural capital assets and strategic and management priorities to invest in
- to decide on what ecosystem services to offer to nature markets
the NCA has enhanced the organisation's reputation and improved potentials for green financing opportunities ~ Forestry England
Gave me the confidence to continue the path I was following ~ Cholderton Estate
hugely useful... great recognition that natural capital assets are [also financial] assets ~ Northumbrian Water
gained further insight into the inner workings of the business ~ Manulife
Contents
Foreword
Nat Cap Statements
TM
Thinking Differently About Nature
Investing in What Matters Most
Meaningful Disclosure with TNFD
Natural Capital Accounting with eftec
Contact & More
Subscribe to our newsletter
Get in Touch
eftec@eftec.co.uk
+44 (0) 20 7580 5383
eftec.co.uk
View project examples & newsletter archive:
Our Projects
Our News
Natural Capital Accounting with eftec
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How NCA helps you think differently about nature, supports investment , and TNFD disclosure
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Transcript
Natural Capital Accounting
for investing in what matters most
Contents
Foreword
Nat Cap Statements
TM
Thinking Differently About Nature
Investing in What Matters Most
Meaningful Disclosure with TNFD
Natural Capital Accounting with eftec
Contact & More
Foreword
We depend on nature. Unfortunately, most of us forget about this when making business and policy decisions. Environmental economists work to ensure we have better memories: we combine scientific evidence with economic analysis to make nature's invisible values visible. We show an organisation's impacts and dependencies on nature and how financially material nature is for the organisation. This brochure is about one particular way of doing this: natural capital accounting. Natural capital accounting will help you to:
- think differently about nature
- identify how to invest in what matters most
- monitor and disclose for nature markets and initiatives such as TNFD
For details on how to work with us to prepare your natural capital account, see here or contact us for more informationContents
Foreword
Nat Cap Statements
TM
Thinking Differently About Nature
Investing in What Matters Most
Meaningful Disclosure with TNFD
Natural Capital Accounting with eftec
Contact & More
NatCap Statements
TM
Natural capital accounting is a systematic way of collating and analysing environmental, financial, and socio-economic information. It uses the familiar and effective formats from financial accounting, with some necessary revisions: Natural Capital Balance Sheet This shows the value of the natural capital assets and liabilities of the organisation. Both the asset values and liabilities are projected over a relevant future period. Asset values include benefits derived from nature, for both the organisation and the rest of society. Liabilities are the costs the organisation does, or plans to, incur to produce those benefits or to maintain the stock of natural capital assets. Natural Capital Income Statement This shows the positive and negative changes due to the activities of the organisation during a given financial year. Changes that affect both the organisation and the rest of the society are shown. Both aim to show monetary values as much as possible but could also contain non-monetary information. Notes are prepared to show data sources and assumptions.
NatCap Statements
TM
for impacts & dependencies such as:
for impacts & dependencies such as:
Aligned to BSI 8632 & ISO 14054
Inputs to nature market reporting & TNFD, CSRD disclosures
Contents
Foreword
Nat Cap Statements
TM
Thinking Differently About Nature
Investing in What Matters Most
Meaningful Disclosure with TNFD
Natural Capital Accounting with eftec
Contact & More
Thinking Differently About Nature
Natural capital accounting focuses decision makers' attention on the stocks of natural capital that underpin the flows, benefits, and value creation.
Benefits to business and society
Value
Stocks
Natural Capital
Flows
Ecosystem servicesAbiotic Services
This can answer the ultimate sustainability question: are we maintaining the stock of natural capital sufficiently for it to continue to provide us with flows of benefits and value?
Natural Capital Accounting helps organisations think differently about nature:
Watch eftec CEO, Ece Ozdemiroglu, explain in this short video
To see nature as an asset, not just a risk
To classifiy spending on nature as an investment, not an expenditure
To understand how nature is financially material
Or continue to see how natural capital accounting supports investment
To use the info for scenario testing, like in management accounting
To become high integrity buyers and sellers in nature markets and to disclose
Contents
Foreword
Nat Cap Statements
TM
Thinking Differently About Nature
Investing in What Matters Most
Meaningful Disclosure with TNFD
Natural Capital Accounting with eftec
Contact & More
Investing in what matters most
invest in what matters most
Natural Capital Accounting helps you identify investments that are ecologically appropriate, economically beneficial, financeable, and socially & politically aligned...
Economically beneficial
Ecologically appropriate
Socially & Policy aligned
... and after investing, it helps you with continued monitoring of the natural asset, as well as with disclosure through frameworks such as the Taskforce on Nature-Related Financial Disclosures (TNFD)
Financeable
Monitor & Disclose
Investing in what matters most in Hampshire:
Ecologically Approppriate
Economically Beneficial
Defra's ELMs test & trial: land management & finance opportunities
Baseline values from nature at over £660million/year
Socially & Policy Aligned
Financeable
See the full case study on our website
Emerging
Available
Contents
Foreword
Nat Cap Statements
TM
Thinking Differently About Nature
Investing in What Matters Most
Meaningful Disclosure with TNFD
Natural Capital Accounting with eftec
Contact & More
Natural capital accounting for TNFD
An organisation that has prepared a natural capital account will find it easier to adopt TNFD
this natural capital account has made it easier to decide to adopt and know how to adopt TNFD United Utilities
TNFD's LEAP approach
is supported at each stage
by NatCap StatementsTM
LOCATE
Natural Capital Asset Register
Location productionmetrics
The interface with nature
Ecosystem integrity
Other corporate data
Biodiversity importance
Physical water risks
Physical & Monetary Flow Accounts Materiality Assessment
EVALUATE
Dependencies & Impact Metrics
Dependencies & impacts
Ecosystem services
Impact drivers
State of nature
ASSESS
Risk & Opportunities Metrics
Natural Capital Risk Register
Physical risks
Systemic risks
Transition risks
Risks & Opportunities
Natural Capital Balance Sheet
Opportunites
PREPARE
Materiality Assessment, Asset Values Production & Maintainance Costs
Response metrics
Risk management
Capital Allocation
To respond & report
Strategy
Governance
When it's time to disclose with TNFD, having a natural capital account will support you
Using the data from the Natural Capital Account
Interpreting Natural Capital Accounts & scenario analysis
United Utilities Natural Capital Journey
Refreshed Materiality Assessment for TNFD, TCFD, and ISSB Disclosure
First Corporate Natural Capital Account
Sustainable Catchment Management Programme
Corporate Natural Capital Account
North West Baseline Account
2023
2005
2018
2015
2019
2021
2022
2024
Natural Capital North West Governance Group
Catchment Systems Thinking (CaST)
Integrated Catchment Approach
UU become a TNFD Early Adopter
Adapted from United Utilities' Corporate Natural Capital Account (2024) & Unitied Utilities' Sustainability Report (2024)
United Utilities Natural Capital Balance Sheet
56,000 hectares of mountain, moorlands, heath and grassland across the North-West of England
Net natural capital asset value (asset value – liabilities) of £4.5 billion over 60 years
Contents
Foreword
Nat Cap Statements
TM
Thinking Differently About Nature
Investing in What Matters Most
Meaningful Disclosure with TNFD
Natural Capital Accounting with eftec
Contact & More
Preparing accounts
We collate data across the organisation & external sources to prepare your natural capital accounts
Natural Capital Accounting with eftec
Auditing
Coaching
Using our bespoke checklist, we audit the alignment of your account with the British Standard on Natural Capital Accounting for Organisations (BSI 8632:2021)
We coach your team to set up the accounting system, prepare your natural capital accounts, and compare changes across years
Our process is flexible
Good practice at eftec means:
Our portfolio
We started with preparing national accounts for the UK, UK Overseas Territories, and research for organisations like European Commission and European Investment Bank, ISO and BSI. The leaders in natural capital accounting are organisations and investors closer to land, water, and the sea: those who are more aware of their impacts and dependencies on nature and familiar with long term and/or asset management planning. Increasingly, we see more clients in manufacturing and other industries.
Blue chip companies with land-based investments around the world
UK & Ireland Snapshot
Who are our clients?
By land use type/industry
Organisation type
20%
47%
19%
14%
Why do our clients commission natural capital accounts?
Reasons for conducting a natural capital account
the NCA has enhanced the organisation's reputation and improved potentials for green financing opportunities ~ Forestry England
Gave me the confidence to continue the path I was following ~ Cholderton Estate
hugely useful... great recognition that natural capital assets are [also financial] assets ~ Northumbrian Water
gained further insight into the inner workings of the business ~ Manulife
Contents
Foreword
Nat Cap Statements
TM
Thinking Differently About Nature
Investing in What Matters Most
Meaningful Disclosure with TNFD
Natural Capital Accounting with eftec
Contact & More
Subscribe to our newsletter
Get in Touch
eftec@eftec.co.uk
+44 (0) 20 7580 5383
eftec.co.uk
View project examples & newsletter archive:
Our Projects
Our News