The Digitization of the UK Natural Capital Accounts & The Role of XBRL

1. Digitization of The UK
Natural Capital Accounts
&
The Role of XBRL!
Presented by:
Liv Apneseth Watson
Sr. Director
Workiva, Inc. [NYSE: WK]
Brad Monterio
Managing Director
ColcomGroup

2. Today's Agenda
• The Future of Business Reporting - "As Usual" Not an Option
• About Natural Capital Accounting
• Natural Capital Accounting Today
• The Structured Data Task Force (INCA-SDTF)
• Combing Forces on Natural Capital Joint Statement

3. The Future of Business Reporting
"As Usual" Not an Option

4. Business "As Usual" Not an Option

5. Corporate Disclosure "As Usual" Not an Option
• <IR> was developed to be consistent with a number of
corporate reporting trends taking place across the globe.
• <IR> aim to align capital allocation and corporate behavior
to wider goals of financial stability and sustainable
development through the cycle of integrated reporting and
thinking.

6. About Natural Capital
Accounting

7. There are four basic natural capital accounting categories:
• Air
• Water
• Land
• Biodiversity
These provide us with the crucial renewable and non-renewable
resources and environmental services that benefit society as a whole.
(All are interdependent)
Natural Capital Accounting

8. WHY ?
(1) The Statical View - Green Gross Domestic Product (GGDP)
Calculating GGDP requires that net natural capital consumption, including resource
depletion, environmental degradation, and protective and restorative environmental
initiatives, be subtracted from traditional GDP.
GGDP would arguably be a more accurate indicator or measure of societal well-
being.
The environment, our natural capital, is a resource that is used and
managed by individuals, corporations and governments.
(2) The Corporate View - The NCA Corporate Disclosure
Companies that embrace natural capital accounting are more likely to come to grips with
the major challenges and risks facing the environment, society and their economic
development.

9. WHY Public ?
Gross Domestic Product (GDP) looks at
only one part of economic performance
"income"
but says nothing about "wealth and
assets that underlie this income.
GDP = private consumption + investment + government consumption + (exports − imports).
European System of Accounts which is broadly consistent with the UN System of National Accounts

10. WHY Private ?
Globally, we are drawing down on our natural capital
provisions at a rate of 50 percent more per year
than the earth can replenish and the rate of
depletion is accelerating.
Natural assets are co-owned so value that corporates
derive from their consumption is in fact value
that they are deriving from society at large,
often at a discount, or even for free.
Source: https://climatecare.org/can-natural-capital-accounting-add-value-to-your-sustainability-programme/
MANAGE
RISK
+
GAIN COMPETATIVE
ADAVANTAGE

11. Natural Capital
Accounting Today

12. In 2015, countries adopted the
2030 Agenda for Sustainable
Development and its 17
Sustainable Development
Goals.
In 2016, the Paris Agreement on
climate change entered into
force, addressing the need to
limit the rise of global
temperatures.
17 Goals to Transform Our World
2030 Agenda for Sustainable Development
Note: 193-of the Member United Nations General except USA and Syria

13. National Accounts DataEntity Disclosures
Natural Capital Accounting Today
Differences are related to the different focus of interest
PURPOSE:
• Assessment of business impacts and
dependencies on natural capital
• To help generate trusted, credible and
actionable information to inform
decisions
MEASUREMENTS:
• Companies focused mainly on
measuring flows of natural capital.
• Companies use prices and/or values
(changes on welfare), depending on
the perspective of their assessment
(business vs. societal).
PURPOSE:
• Support policy-makers on assuring
future growth and society’s welfare,
including management of sector and
thematic issues (e.g. forestry, water)
• Assessment of depletion and
degradation of natural capital at national
and sector level, measurement of
environmental pressures and policy
responses.
MEASUREMENTS:
• SEEA measures both stocks and flows.
• Market prices is the most common
monetary valuation approach used in
SEEA. There is also a more
experimental approach to promote the
assessment of non-market values of
ecosystem services.
Do we have a
problem?

14. Natural Capital Accounting Reporting Frameworks and Standards
Private and public approaches to the development of
natural capital assessment and accounting can and
should be complementary
National AccountsEntity Disclosure
GGDP Reporting Standards
• The System of Environmental-
Economic Accounting (SEEA)
• Local National Natural Capital
Accounts Extensions
Standardized Economic
Accounting Frameworks
• ISO 2600
• ISO 14007 + 14008
FASB ACCOUNTING STANDARDS
AND NATURAL CAPITAL
• Topic 410 Asset Retirement
and Environmental Obligations
• Topic 420 Exit or Disposal
Cost Obligations
• Topic 450 Contingencies
• Topic 905 Agriculture
• Topic 930 Extractive Activities
– Mining
• Topic 930 Extractive Activities
– Oil and Gas
IFRS AND NATURAL CAPITAL
• IFRS 6 Exploration for and
Evaluation of Mineral
Resources
• IAS 41 Agriculture
• IFRIC 6 Liabilities Arising from
Participating in Specific Market
– Waste Electrical and
Electronic Equipment
• IFRIC 20 Stripping Costs for
the Production Phase of a
Surface Mine
CDP, GRI, SASB
MORE........(i.e, 40 + today)

15. The Natural Capital Protocol Protocol

16. The ICAEW Natural Capital Accounting
- Structured Data Task Force (INCA-SDTF) -

17. The Project
UK Environmental Accounts
by 2020
The ICAEW Natural Capital Accounting - Structured Data Task Force (INCA-SDTF)

18. About the ICAEW Natural Capital Accounting - Structured Data Task Force (INCA-SDTF)
CHARTER MISSION
• Provide recommendations and guidance to inform ONS's’s
decision on whether to implement an XBRL strategy and
pursue development of an XBRL implementation program
for its reporting framework.
OBJECTIVES
• Determine how XBRL will help companies adopt and
disclose using the SASB standards
• Assess the feasibility of an XBRL implementation program
for SASB standards by looking at the full implementation
lifecycle for XBRL (sourced from XBRL International Best
Practices Board) to determine the business requirements,
value propositions, resource needs, risks, opportunities
and impact on SASB and its stakeholders.
• Identify possible XBRL-related revenue opportunities for
SASB (e.g., education and training)
DELIVERABLES
• Final XBRL Feasibility Study / 2018
ICAEW Leads:
Richard Spence
Francesca Sharp
Co-Chairs:
Project Team
Members:
• Tanuj Agarwal
• Phillip Allan
• Glen Gray
• Pierre Hamon
• Ian Hicks
• Gavin Marais
• Richard Mattison
Project Team Members:
Project Team:
Lindsay Cirks; Kathy Dubansky; Ally Sabrowsky
• Urmish Mehta
• Maria Mora
• Conor O’Kelley
• Laura Irina Rusu
• Greg Soulsby
• Mike Zimonyi

19. Natural Capital Accounting and
GAAP Standard Setters ,
Regulators, Policy Makers, and
Other Standard Setters i.e SEEA
Develop a Core Natural Capital Accounting Vocabulary of UK's
National Accounts
CORE
NCA
Vocabulary
(i.e., XBRL
Taxonomy
+
Metadata
Schema)
Entities
Supervisory
Reporting
NCA Members
Harmonization
Ontology
Multilingual
ReportingFramework
A Goal of Semantic Interoperability
• Refers to the preservation of meaning in the exchange of
electronic information
A Goal of Developing of Core NCA Vocabulary
• Development a Natural Capital Asset Description Metadata
Schema
Foster an Open Data Platform of NCA Data
• Fosters the interoperability of open data portal
Who needs to be at the table?

20. Combing
Forces on
Natural
Capital
Joint
Statement

21. Thank you for
your attention!
ICAEW Leads:
Richard Spence
Francesca Sharp
Co-Chairs:
Project Team Members: