Journal of Accountancy Large Logo
Home > U.K. Government White Paper Calls for Tracking Green Losses, Gains
ShareThis
|
INTERNATIONAL / SUSTAINABILITY

U.K. Government White Paper Calls for Tracking Green Losses, Gains

 

June 22, 2011

The U.K.’s Department for Environment, Food and Rural Affairs (DEFRA) presented a white paper on the environment to Parliament June 7 that calls for the creation of an annual statement of green accounts showing what the British economy has withdrawn from nature versus what’s been invested in it.

 

This approach would enable the government to assess green losses and gains alongside traditional measures such as gross domestic product, according to DEFRA.

 

“Nature belongs to us all, and we’ve all got a vested interest in protecting it,” said Environment Secretary Caroline Spelman, in a press release. “We can all gain from the economic, social and health benefits nature give us, but we need to recognize that if we withdraw something from Mother Nature’s bank, we’ve got to put something back in to ensure that the environment has a healthy balance and a secure future.”

 

The white paper, called “The Natural Choice,” aims to improve the quality of the natural environment across England, halt the decline in habitats and species and strengthen the connection between people and nature. DEFRA said the recommendations contained in the plan would involve a “radical shift” in how natural resources are viewed by British businesses and the public by incorporating the environment into economic planning and encouraging the development of green business opportunities.

 

“In the past, we have undervalued what our natural environment gives us,” Spelman said. “This white paper changes that, because we cannot afford to make the same mistakes again.”

 

The plan calls for the creation of the Natural Capital Committee, an independent group that would report to an economic affairs committee chaired by the chancellor. The group would provide advice on when, where and how natural assets are being used unsustainably. It also would advise the government on how to set priorities for the protection and improvement of natural capital.

 

DEFRA defines natural capital as the value of physical environmental assets, such as fish stocks and forests, and also the value of natural services provided by a healthy ecosystem, such as insect-borne pollination of crops.

 

An additional business-led task force would be charged with the mission of expanding business opportunities from new products and services that are good for the U.K. economy and nature alike.

 

Spelman added that, if the plan is put into law, DEFRA would work with the Office for National Statistics to include economic losses and gains resulting from changes to natural capital in the U.K. Environmental Accounts, with early changes by 2013.

 

“We will put natural capital at the heart of government accounting,” said the white paper. “Better accounting–by business and by government–would enable better choices, so that society can use natural capital sustainably.”

 

The white paper pointed to athletic shoe and clothing designer Puma as an example of a company using “green accounting.” Working with PricewaterhouseCoopers, Puma created an “environmental profit and loss account” that shows the monetary value of the company’s greenhouse gas emissions and water consumption across its entire supply chain. According to the white paper, Puma believes that calculating these impacts will help it reduce costs and develop a more sustainable and resilient business model by safeguarding the resources and ecosystems upon which it depends for long-term success.

 

Later this year, the U.K. government will publish a report to provide business with more clarity about the future direction of policy.

 

The paper also says that DEFRA will issue guidance for British businesses in 2012 on how to measure and report corporate environmental impacts. It will cover areas such as water use and waste, as well as impacts on natural resources and biodiversity.

 

In the U.K., the government uses white papers to outline policy proposals on topics of current concern prior to the introduction of legislation.

 

Also read:

 

More from the JofA:

 

 Find us on Facebook  |   Follow us on Twitter  |   View JofA videos

View CommentsView Comments   |  
Add CommentsAdd Comment   |   ShareThis

RELATED TOPICS

CPE Direct articles Web-exclusive content
AICPA Logo Copyright © 2013 American Institute of Certified Public Accountants. All rights reserved.
Reliable. Resourceful. Respected. (Tagline)