Accounting for natural capital

Abstract

Chapter 13 sets out the principles that lie behind designing a system of accounting for responsible business. It considers this in the context of accounting for natural capital. It describes how accounting in a mutual context has to be intrinsic in the sense of promoting the enhancement of natural capital for its own ends, not extrinsic to shareholder interests in being motivated by a desire to enhance profit and shareholder value. Secondly, the accounting system should reflect the full impact of a company on natural capital. Thirdly, accounting needs to recognize the strong non-linearities in natural capital-for example, threshold levels below which it is prone to collapse. Finally, accounting for natural capital should reflect a corporate purpose that places the intrinsic benefits of natural capital at its heart.