Workstream 1: Natural Capital Accounting James Spurgeon Director, Sustain Value Workstream leader Brussels, 27/10/2015 Summary of 2015 output

EU Business and Biodiversity Platform Workstream objectives  WS1 focus: ‘natural capital accounting for business’  Aim: not to develop new methodologies, but build upon and link existing approaches.  2014 work: developed a guide & decision-matrix tool to help companies decide what NCA approach to undertake.  Objective of 2015 work: ‘Investigate natural capital accounting linkages between businesses, governments and financial institutions, with a focus on applications (i.e. uses), approaches (e.g. methodologies and tools), data requirements and data sources'. BUT: Main focus on reporting and accounts – and excluded tools. Objectives Approach Key findings Further work

EU Business and Biodiversity Platform Approach and method Objectives Approach Key findings  Questionnaire survey: Sent to all platform members, observers and representatives (beginning May to end July 2015)  Brief literature review  Workshop & briefing note (July 6 th in Brussels)  Report (draft and final) – Final now available on Platform website Further work

EU Business and Biodiversity Platform Comparison of ‘reporting’ & ‘sets of accounts’ Objectives Approach Key findings Further work

EU Business and Biodiversity Platform Key differences overall Objectives Approach Key findings  Sets of accounts do not align – e.g. biodiversity, values for residuals & expenditures  Businesses/private FIs – generally optimise financial profits  Governments/public FIs – generally optimise societal benefits  Businesses/private Fis – generally assessed flows of value & impacts  Governments/public FIs – generally also assess assets (i.e. stocks).  Private Fis have lagged behind.  Similar NCA applications for each sector, but slight differences too: –supply chain risk assessment for businesses, –credit risk assessment for FIs, –importation/exportation of ecological debt for govs. Further work

EU Business and Biodiversity Platform Key similarities overall Objectives Approach Key findings  Measurement of physical units for emissions/residuals  Many similar applications e.g. option appraisals, risk assessments etc.  All recognise need for consistency & need for improved sharing of data.  NCA can play important role for each sector in developing & implementing: market-based instruments, green infrastructure and ecological restoration. –different interests and motivations –synergies from working together Further work

EU Business and Biodiversity Platform Overall challenges and recommendations Objectives Approach Key findings  Business and government reporting and accounts not fully aligned  Lack of certain types of data –e.g. dose-response, biodiversity, restoration costs etc.  Problems over sharing data –Intellectual property, competitive advantage & cost sharing etc.  Challenges around valuation –Difficulties, lack of consistency and opposition. In particular requiring Greater co-operation, alignment and shared incentives over: Approaches, new studies and data sharing Further work

EU Business and Biodiversity Platform Possible work for 2016 Objectives Approach Further work 1.Continue to work on comparing NCA applications and identifying ways to fill data gaps and enhance synergies amongst the four sectors. 2.Explore the role and value of reporting on company expenditures on managing natural capital – in particular maintaining and restoring habitats. 3.Investigate how NC impacts and values can be better linked into LCA. 4.Investigate how companies can best address, measure and disclose information on their natural capital dependencies. 5.Explore further the concept of NC balance sheets (i.e. for land holding companies and those with landholding suppliers). 6.Investigate the extent to which investment-rating agencies are considering how companies adopt NCA approaches. 7.Update NCA Guide and Decision-matrix tool developed in Key findings

Workstream 1: Natural Capital Accounting François-Xavier Morvan Sustainability Performance Manager Kering Brussels, 27/10/2015 Kering: Feedback on NCA experience

 The most significant drivers of our impacts  The full spectrum of our offices, retail operations and supply chain  The impact of every day decisions  The most significant drivers of our impacts  The full spectrum of our offices, retail operations and supply chain  The impact of every day decisions understand  Develop more robust business procedures  Implement targeted projects  Share and communicate more effectively  Develop more robust business procedures  Implement targeted projects  Share and communicate more effectively allows us to

578 processes, 107 materials, 126 countries

Workstream 1: Natural Capital Accounting Joop van Bodegraven Program Manager Natural Capital Netherlands Ministry of Economic Affairs Brussels, 27/10/2015 Netherlands Ministry of Economic Affairs: NCA approaches in government

EU-Platform B&B Dutch Government & Natural Capital Accounting Joop van Bodegraven Department of Nature & Biodiversity Natural Capital Cluster Ministry of Economic Affairs Program 1.Policy process on NCA 2.Example 1: Atlas NC 3.Example 2: CBS-project The Netherlands Ministry of Economic Affairs

Many Natural Capital Activities NL EU-B&B octobre 27 th 2015 Ministry of Economic Affairs 16 international national EU MAES

To a focussed NL policy vision on NCA Context : Densely populated, industrialised, intensive farming, etc. Food industry, chemical industry, international trade Resulting in: Ecological footprint, biodiversity degradation Dependency on scarce resources, risks economic growth Challenges : Acknowledge values of NC / ESS  Sustainable use of ESS & Nature inclusive solutions Info on impacts & dependencies  Accountable, transparent business, finance, authorities Sustainable business is mainstream  Decreasing ecological footprint Sustainable economic growth  Circular economy, resource-efficiency, green innovations (potential) Vision : Nature (ecology) and economy can reinforce one another Leading in sustainable (“green”) innovations Integration NCA / EP&L in decision making of business, government and society by 2020 Government role? Many activities on NCA, some programs coming to a close in 2016  need for Focus Round table discussions with stakeholders & National Conference NC (Utrecht) Policy document and focussed program on NC 2016 (?) EU-Platform B&B Ministry of Economic Affairs 17

Translating vision into potential lines of action Inclusive decision making Decreasing ecol. footprint; increasing earning capacity Sustainable Innovations 1. Business Accounting Standards, tools for IR, regulation non-financial information 4. Credit- and investment policy Financial institutions, governments 2. Government Accounting Natural capital accounts WAVES 3. Consumer information Benchmarks, labelling products and services, truepricing 5. Sustainable procurement NC criteria in procurement authorities 6. Data Provide information and knowledge, identify gaps 7. Sustainable landscapes. Integrate NC in regional economic decision making & development 8. Sustainable commercial chains Integrate NC to develop sustainable commercial chains & circular econ. Potential lines of action Targets Focus on 3 main workstreams: 1.Enabling environment for business NCA: - Facilitate information & knowledge  Atlas Natural Capital - (International) standards & tools (NCP, True pricing, Benchmarks, Implementation EU Accounting Directive (2013/34, 2014/95) ) 2.Give the right example: - National (& regional) NC-account:  CBS Sustainable procurement: pilots NC-criteria in action plan - Policy indicators ESS: to be used in policy assessments (PBL) 3.Integrate NCA in spatial planning in a integrated landscape approach: - Pilots with NCA &true pricing. - Guiding document NC in SCBA.

Natural Capital Account project CBS Target: An accounting system for integrated ecosystem services and ecosystem conditions additional to the System of National Accounts (SNA) and environmental accounts. (some national capital components are already in those accounts). Leading: Statistics Netherlands (CBS) / Wageningen University (WUR) Funding: Ministries of Economic Affairs, Infrastructure & Environment Building on: International methods and standards like UNSD SEEA-EEA, MAES, WB/WAVES, etc. Ecospace-project: physical + monetary ecosystem accounts in NL, Nor, Indon. ( ) Natural Capital Accounts in 2 NL municipalities (2013) and prov. of Limburg (2015). Results: Inventories of available data (including time-series), and ways to use them. LCEU-Maps: Land Cover and Ecosystem functional Units: 31 types of ecosystem and land use types present in the Netherlands. Land by economic activity Maps: users & suppliers of e.s.s.: (cadastral); prov. Limburg Conceptual ecosystem condition account. Tests of various valuation-models (monetization) to be used in NCA. Planning: a complete set of physical and monetary NC Accounts for the Netherlands: 2018 EU-B&B octobre 27 th 2015 Ministry of Economic Affairs 19

What? - National platform for information on NC and ecosystems and ecosystem services (CICES and more). Trial version open for public from where NC/e.s.s., conditions & trends, policy, sustainable use, examples digital maps (and growing fast). - cooperation of RIVM, WUR, Deltares and many others. - still little quantitative information, no monetisation,  more in future. Targetgroups? - authorities - business - ngo’s - consumers - science

March 19 th 2015 Ministry of Economic Affairs 21 Thank You !

Workstream 1: Natural Capital Accounting Andrew Mitchell co-Director, NCD Founder of the Global Canopy Programme Brussels, 27/10/2015 International initiative: Natural Capital Declaration

Advancing environmental risk management in the financial sector Banks / Investors / Insurance

Deforestation Risk Policies Fig.1 The percentage of Forest 500 companies that have made cross-commodity zero or zero net deforestation pledges or have commodity-specific sourcing policies. 250 Companies 150 Investors Fig.2 The percentage of Forest 500 investors that have made cross-commodity zero or zero net deforestation pledges or have commodity-specific policies related to their lending portfolios. 1 1

Workstream 1: Natural Capital Accounting Brussels, 27/10/2015 Panel discussion

Workstream 1: Natural Capital Accounting Brussels, 27/10/2015 Lunch Break