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Current disclosures - which detail the loss of natural capital and the implications for companies, profit, asset value and cashflow – are too limited to provide insight for industry in relation to managing their future risk, a study from KPMG shows.
The report - Is natural capital a material issue? - sought to explore the accounting profession's awareness of the declining natural capital and its impact on business risk levels.
The report also found that the very perception that natural capital could be viewed as a risk, varied among accountants.
KPMG surveyed 200 accountancy professionals – 60% of whom agreed that the natural world was important to their business, while more than half indicated they had included natural capital issues in their company’s business risk evaluations at some point.
Nearly half (49%) identified natural capital as a material issue for their business and linked it to operational, regulatory, reputational and financial risks.
Author of the report, Stephanie Hime of KPMG’s climate change and sustainability practice said that specific parts of natural capital are increasingly being recognised as critical and material business issues.
‘This report aims to bring a new audience into the debate by focusing attention on what the accountancy profession can do to mitigate these risks,’ said Hime.
Source: Accountancy Live
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