Companies should take the practical step of adding the value of ‘nature’ to annual accounts to
help save the planet, according to Professor Paolo Quattrone of Manchester Business School, and Associate Professor Ariela Caglio of Bocconi University, Milan.
Quattrone and Caglio believe adding a line for nature in the current accounting and auditing system would allow nature to be a visible key stakeholder and to have a voice and value.
This approach would also allow greater focus and capital to be given to nature – and human activity would move decisively and permanently to net positive.
Their long-term hope is that governments, central banks and regulators legislate to make this compulsory – but in the meantime, they urge corporations, and indeed all organisations, to start adding nature in their financial reports voluntarily and to set up bonds for nature’s repair and revival.
Quattrone stressed: “Currently, financial structures are not set up to recognise nature in financial reports. With its roots in the first industrial revolution, and codified by Adam Smith, who reduced value to utility, and in turn market price, the current accounting system recognises only production and assets and not how nature is affected – usually damaged, destroyed or exploited – by this production.
“The addition of a Provision for Nature in the Value-Added for Nature Income Statement (VAN) would force stakeholders to pay serious attention to how we relate our corporate activity to nature.”