Natural capital accounting

Natural capital accounting is the method we use to identify, value and measure our environmental assets, or natural capital. It records baselines of and changes in the extent, condition and value of natural capital.

This method is also called environmental-economic accounting, which has been endorsed by the Australian Bureau of Statistics and United Nations Statistical Commission, 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
• relationship between how we use our natural resources and the effect that has on our economy and society over time.

We can use this information to make better, informed policy and program decisions.

Benefits for decision making

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

Natural capital accounting is not a quick solution, but it will provide information to help us consider and address the impacts of our policies and programs on the health of the environment.

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
• help government agencies and private and public companies share financial information related to their efforts to benefit nature, which aligns with international goals for businesses to be transparent about their risks, dependencies and impacts on biodiversity set by the Taskforce on Nature-Related Financial Disclosures
• give investors more confidence that the money they invest in nature will have positive environmental impacts
• contribute to the NSW Government’s Performance and Wellbeing Framework and future NSW State of the Environment reports.

Find out more

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

Natural Capital Accounting Hub