Natural capital accounting

Natural capital is the term we give to our environmental assets, the services they provide and how they support our society. It includes clean air, water, fertile soil, grasslands, biodiversity, forests, energy and minerals.

Natural capital accounting is the method we use to identify, value and measure the contributions and services our natural capital makes to our economy and society. It records baselines of and changes in the extent, condition and value of natural capital. This method, called environmental-economic accounting, has been endorsed by the United Nations Statistical Commission and the Australian Bureau of Statistics and is part of Australia's System of National Accounts.

Understanding effects and relationships

Being able to properly measure changes in natural capital over time gives us a better understanding of the overall health of our economy and the environmental systems supporting it.

Including natural capital information in our standard economic accounting frameworks is a valuable way of getting a more detailed understanding of the:

• effects of our policies and programs on the health of the environment
• relationship between a healthy environment and our economic and social wellbeing.

Natural capital accounts will help Australia's government, corporate and private sectors monitor and report on natural capital, including carbon outcomes, and use this information to make better, informed policy, program and business decisions.

Benefits for decision making

Natural capital accounting is important to the private and public sectors because nature underpins our economic growth, but it is currently left out of the tools that businesses and governments use to inform their decisions.

Understanding and tracking the extent, condition and value of natural capital assets and services over time can help us prioritise natural assets, including ecosystems, that need conservation or reinvestment to ensure their sustainability.

The information gathered using natural capital accounting, and its reporting framework, will:

• Help both government agencies and private companies take part in markets that focus on the value of nature and its ecosystem services.
• Help these groups share financial information related to their efforts to benefit nature and disclose their impact on nature.
• Give investors more confidence that the money they invest in nature will have positive environmental impacts.
• Contribute to the NSW Government’s State of the Environment reports.

Find out more

Please visit the Natural Capital Accounting Hub for more information and access to NSW Natural Capital Accounts, datasets, framework (how accounts are created) and forums.

You can also contact the team at [email protected]