Accounting for nature and the bottom line: improving returns on investment

Author: Simon Tweed, Manager – Natural Capital Strategy

March 26, 2024

News & Insights

As nature repair and natural capital markets continue to develop, Niche is exploring new opportunities for clients to participate in these markets, improving financial and environmental returns on investment. The internationally recognised Accounting for Nature® Framework offers such an opportunity.

 

Metrics to substantiate environmental claims

 
Increasingly, organisations and projects need to be able to substantiate claims about the environmental benefits from their activities.
 
This can be important from a reputational and social licence perspective, to avoid concerns about greenwashing, demonstrate progress on corporate sustainability goals, or to reassure stakeholders.
 
Demonstrable and measurable environmental improvement can also be a condition of accessing public or private finance and for participating in nature capital and credit markets.

 

Measuring benefits of accounting for nature

 
The Accounting for Nature Framework provides an accredited environmental accounting standard, based on the work of the Wentworth Group of Concerned Scientists
 
Environmental funds, projects or landholdings can be registered and certified under the framework. This enables tracking of environmental condition over time, measuring the effects of environmental improvement projects.
 
The framework is now being used to underpin nature capital markets, for example trading in premium carbon markets, where credits are sold at a higher price when they demonstrate a biodiversity benefit beyond typical carbon planting.
 
For organisations looking ahead to reporting under the Taskforce on Nature-related Financial Disclosures framework (TNFD), the Accounting for Nature framework can also provide a baseline for comparing metrics across different types of projects and tracking nature gains over time.

Beyond compliance: Nature-positive management as part of the land-use mix

 
Niche is the premier provider of offset strategies in NSW under the Biodiversity Offset Scheme. Our assessments of credit-generating landholdings increasingly consider the range of opportunities to generate natural capital and associated credits (not just to meet compliance). We encourage clients to think strategically about ways to go beyond their compliance obligations and improve the overall quality of their landholdings.
 
While biodiversity offsets have traditionally been considered for parts of landholding separate from productive lands, nature repair markets offer a new way of considering land use and integrating sustainable approaches, which can be supported by the Accounting for Nature framework.
 
Since it can be used to measure improvements across all aspects of environment, including soil and water quality, the framework incentivises and rewards more holistic environmental outcomes. It allows landholders to practise intelligent land management and can offer multiple benefits for landholders aiming to increase the health and resilience of their productive land.
 
Tracking a wider range of improvements can offer the opportunity to generate additional returns on parts of a holding that were not suitable for generating biodiversity or carbon credits. It can also offer opportunities to consider ‘mixed-model’ nature-positive projects that may not have been viable under individual schemes.
 
The resulting land use mix may include areas dedicated to:

  •  Biodiversity offset (species and ecosystems stacked)
  • Carbon farming (which may include actions to provide additional biodiversity or other co-benefits for example, premium carbon credits)
  • Nature repair (improvements to land which may generate nature repair credits)
  • Agriculture (including sustainable practices which might generate nature or carbon credits through soil enhancement for example)
  • Development that co-exists with and improves biodiversity values.

 

Adding to Niche’s strategic advisory offering

 
For us, having staff accredited under the Accounting for Nature framework was an obvious addition to Niche’s toolbox of strategic advisory options.
 
The existing methodology for biodiversity assessment in a regulatory sense (the NSW Biodiversity Assessment Method) is also now accredited under the Accounting for Nature framework. This means a consistent approach towards assessment can be adopted for projects seeking to address compliance issues, those leveraging voluntary markets or better still, mixed projects.
 
The framework aligns with our approach to offering whole-of-project services and our applied experience in assessing land and designing and engineering projects through multiple frameworks, including carbon credits, biodiversity offsetting and nature repair.

 

Find out more

Beyond sustainability: valuing and managing natural resources
Taskforce on Nature Related Financial Disclosure (TNFD) – Pilot Program
Biodiversity in the boardroom: Beyond compliance to strategic integration.

 

Contact us

To discuss opportunities to assess your project for accreditation under the Accounting for Nature framework, contact Niche.

 

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Excellence in your environment

About the author

  • Simon Tweed B Env Sc (Hons)

    Manager – Natural Capital Strategy

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