From a climate and nature perspective, the year 2030 looms large as a series of global deadlines draw nearer. Among them, pressure to put nature on a path to recovery is ramping up against growing recognition that environmental degradation and biodiversity loss are inextricably linked with climate change.

Bearing in mind the significant financial and organisational risks associated with nature loss, finance sits at the heart of business efforts to respond. However, beyond headline ambitions, many accounting and finance professionals struggle to know where to start.

With many businesses already feeling the effects of nature loss on operations and supply chains – and increasing pressure on businesses to take action – a series of ICAEW projects is under way to help accounting and finance professionals navigate a way forward. 

Richard Spencer, Director of Sustainability at ICAEW, says: “Generally speaking, businesses are getting their heads around climate change. But this is only part of a bigger emergency stemming from the breakdown of our vital, natural life-support systems, including biodiversity, water, soils and the atmosphere. A collective joined-up response is needed.”

An Accounting for Sustainability (A4S) blog published earlier this month with input from ICAEW offers some practical tips on how accountants can start to understand and manage their nature-related risks alongside climate, and to take steps towards a net-zero, nature positive transition. It includes practical actions that the profession can take now, and details of key initiatives relevant to the profession. 

Toby Roxburgh, Nature & Biodiversity Manager at ICAEW, says: “Our members increasingly recognise that this is important, but can find it difficult to know where to get started. We need to help them to get on top of this, build understanding of how to embed nature into risk management, strategy, financial planning and reporting. Accountants have the skillset, what’s needed is knowledge in how to apply the tools already at their fingertips.”

ICAEW continues to support members with capacity building and knowledge on this subject, with a focus on building understanding of how nature connects with their specific professional roles and functions, as well as practical advice on steps they can take in their day-to-day practices.

One such example is a joint project with Lancaster University’s Pentland Centre for Sustainability in Business, co-led by Professor Jan Bebbington, to help build business capacity in the use of biodiversity scenario analysis.

Roxburgh explains: “Scenario analysis is widely used by businesses as a way to test the resilience of their strategies in light of future uncertainties. But aside from some front runners, few are currently using it to look at nature risks and opportunities as part of the picture. This project aims to help change this, focusing on how businesses and accounting professionals can advance use of nature scenarios as part of a resilient business toolkit.”

Regulation and standards also support use scenarios to understand how nature connects to business outcomes. The ISSB, ESRS, GRI and the TNFD all recommend the use of scenarios to help inform assessment, management and reporting on nature-related issues.

“We’re talking to business and finance institutions, government and academics to understand the current state of play and barriers to uptake of scenarios, and are working on recommendations to unlock progress,” Roxburgh says. “Guidance for ICAEW members, including an e-learning course and case studies showing the practical application of scenarios, are planned for this year.”

Meanwhile, ICAEW is one of 10 partners, including the Capitals Coalition, the World Business Council for Sustainable Development, and Cambridge Institute for Sustainability Leadership, collaborating on A-Track – a €11m, four-year EU project to build nature into business decision-making. The project, announced last month, sets out to help businesses, finance institutions and governments build resilience and value by aligning decision-making with the transition to a nature-positive economy.

“The science tells us that we’ve got six years to halve carbon emissions and reverse global nature loss by 2030,” says Roxburgh. “To achieve this, we also know we need to transition to an economy and finance system that is aligned with these goals. That’s going to take an effort of unparalleled commitment, leadership and coordination. With our public interest mandate and focus on value creation, ICAEW and the wider profession can play a key role.” 

The critical importance of nature and biodiversity for finance leaders is reiterated in the agenda for the forthcoming Accounting for Sustainability (A4S) Summit, due to take place on 3 July. It includes dedicated sessions of the role of finance in mitigating risks associated with the nature crisis. Find out more and book your place. 

Further reading

• Access further insights and materials via ICAEW’s Nature and Biodiversity Hub.
• Adopting the TNFD framework needn’t be a challenge