When will your company begin accounting for nature?

Corporate accounting may not sound like a domain that intersects neatly with environmental metrics. While this disjuncture has been historically true, it may be undergoing a 180-degree change.

The Dow Chemical Co. and other corporate decision-makers are looking at environmental metrics as important for incorporating into corporate accounting and spreadsheets. Advocates argue that this work would provide a more complete and accurate picture of the investments and flows of natural resource inputs, as well as goods and revenues from a company over time.

This more comprehensive picture of the business realities is contingent upon introduction of new metrics of how mutually dependent business, built infrastructure and natural systems are functioning today and in the future. Once the analytical approaches are developed in the coming years, this work may well become the norm for business.

In many ways, this shift is what futurist Peter Schwartz would dub an "inevitable surprise." Dave Batker of Earth Economics asserts that we are at a fundamental inflection point in how we track and measure economic and financial "well-being" and flows. In their book "What's the Economy for Anyway?" he and co-author John de Graaf assert:

"We're not in the 20th century anymore. ... The climate is changing, with potentially disastrous consequences. Useful water is less available, while floods are increasingly prolific. Unlike in the 1930s, when roads and indoor plumbing were scarce [in the U.S. and Europe] and forests, water and wetlands were abundant, now roads [in many parts of the world] are abundant and natural systems and their services, such as flood protection, are increasingly scarce and more valuable. Yet neither our economy nor our measures of economic progress reflect these realities."

We need significant changes in what is measured and managed by both the private and public sector alike.

Dow now is trying to identify a pathway forward that can be operationalized in corporate accounting. The company and The Nature Conservancy announced a collaboration in January 2011 to help Dow and other companies recognize, value and incorporate nature into global business goals, decisions and strategies.

Forest image by Stephane Bidouze via Shutterstock.

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