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Corporate natural capital accounting

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  • Richard Barker

Abstract

Accounting is an important practical mechanism by which corporations are held to account for their performance and impact. This is consequential for corporate responsibility for the conservation of natural capital. While there is clear evidence of increasing corporate accounting and reporting with respect to aspects of natural capital, however, such efforts are at best nascent. This is in part because the purpose and meaning of corporate natural capital accounting is not in itself well established, and in part because existing institutional structures and incentives do not lend themselves to giving a full account of natural capital impact. In this context, the paper argues that there is essentially a need for natural capital accounting and reporting systems that serve two distinct purposes. The first, which is the more likely to be satisfied by existing market structures, is oriented towards the informational needs of shareholders and is concerned with supporting a transition towards environmentally sustainable business models. The second, in contrast, acknowledges that a shareholder-oriented perspective constrains natural capital to be important if, and only if, its conservation privately affects shareholders, which is unlikely to ensure an accounting that contributes to the conservation of natural capital as an end in itself. This second purpose of strengthening corporate natural capital accountability is unlikely to be satisfied within existing market structures; instead, it stands in need of a regulatory solution.

Suggested Citation

  • Richard Barker, 2019. "Corporate natural capital accounting," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 35(1), pages 68-87.
  • Handle: RePEc:oup:oxford:v:35:y:2019:i:1:p:68-87.
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    File URL: http://hdl.handle.net/10.1093/oxrep/gry031
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    Citations

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    Cited by:

    1. E. Ingrid Putten & Elizabeth Pinkard & Anthony O’Grady & Rebecca K. Schmidt & Ian Cresswell & Vincent Raoult & Matt D. Taylor, 2021. "Stakeholder perspectives on the value proposition of enterprise-level natural capital accounting for three primary industries," Environment Systems and Decisions, Springer, vol. 41(4), pages 541-555, December.
    2. Herwig Buchholz & Thomas Eberle & Manfred Klevesath & Alexandra Jürgens & Douglas Beal & Alexander Baic & Joanna Radeke, 2020. "Forward Thinking for Sustainable Business Value: A New Method for Impact Valuation," Sustainability, MDPI, vol. 12(20), pages 1-16, October.
    3. Alexandre RAMBAUD, 2023. "How can accounting reformulate the debate on natural capital and help implement its ecological approach?," Working Paper 8567406c-bed0-4401-9792-a, Agence française de développement.
    4. C. A. K. Lovell, 2021. "The Pandemic, The Climate, and Productivity," CEPA Working Papers Series WP112021, School of Economics, University of Queensland, Australia.
    5. Georgina M Mace, 2019. "The ecology of natural capital accounting," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 35(1), pages 54-67.

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