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But not yet on the balance sheet, the Canadian Business Journal

WATERLOO, ON, OCTOBER 5, 2022 (GLOBE NEWSWIRE) — Understanding the financial value provided by natural assets, co-authored by the Intact Center for Climate Adaptation at the University of Waterloo, KPMG and the Local Government Natural Assets Initiative. A new paper calls for recognition, arguing for a review of accounting rules to protect nature’s resilience.

The services nature provides to Canadians are not routinely evaluated in investment decisions, wealth management, or financial reporting. As a result, economic decisions continue to lead to the degradation of natural assets such as rivers, wetlands and forests. To tackle the dual crises of climate change and biodiversity loss, the United Nations urged her G20 countries (such as Canada) to triple his investment in nature-based solutions by 2030. I’m looking for

“Wetlands, forests, salt marshes and grasslands are not only important for biodiversity,” says Mike, President and Corporate Director of the Business Development Bank of Canada (BDC) and President of the Canadian Society for the Conservation of Nature. Pedersen agrees. “They are frontline allies in mitigating the impacts of flooding and erosion, extreme heat and drought, and in removing carbon emissions to slow climate change. We need an accounting system that recognizes this reality.”

COP27 is an important opportunity for Canada to extend its commitment to working with nature to reduce climate risks. “This is an opportunity not to be missed,” emphasizes Joanna Eyquem, Managing Director of Climate Resilient Infrastructure at the University of Waterloo’s Intact Center. “National adaptation strategies that do not add value to the critical services nature provides will be fundamentally flawed.”

The good news, as the report notes, is that over 90 local governments across Canada are taking matters into their own hands. These communities provide services to their citizens, such as the role of wetlands in absorbing rainwater and maintaining good water quality, and the role of trees in providing shade to reduce urban heat and maintain good air quality. We have already identified and evaluated the natural assets we offer. The problem is that the values ​​identified by economists cannot currently be reflected in financial reporting due to Canadian accounting regulations. Both the Public Sector Accounting Board of Canada and the International Public Sector Accounting Standards Board (IPSASB) have projects underway to explore ways to address this shortcoming.

“For accountants, excluding natural assets means not only a potential liability, but also a significant loss of profits entirely,” said co-author and leader of Public Sector Accounting Advisory at KPMG Canada. Bailey Church emphasizes: “It’s effectively a massive, systematic surveillance.”

The report points to three paths that can now be taken to mainstream recognition of the role and economic value of the services nature provides.

  • Allows the inclusion of natural assets in public sector financial statements, as currently under review by the Public Sector Accounting Commission of Canada, which set the standards for public sector accounting.
  • Establish national guidelines and standards for identifying and valuing Canada’s natural assets.
  • Engaging Canadian financial institutions and organizations to set frameworks and indicators to account for the value of nature, direct private sector investments to opportunities for protection and restoration, and enable the return on investment in nature to be measured.

Internationally, countries including the United Kingdom, South Africa and most recently the United States have taken steps to value nature in their national accounting systems. This demonstrates that Canada, with its

“Canadian municipalities show that understanding the value of services from nature can guide actions on the ground to effectively manage natural assets,” co-author Roy Brooke explains. “In the end, it’s the action that counts, not just assigning a value.”

Nature is now assigned virtually zero monetary value, with few incentives for effective management. The report argues that this situation must change if Canada is serious about investing in nature, the foundation of its economy.

Contact details:
Lyon Jones
media relations manager
University of Waterloo
226-339-0894 | @uwaterloonews| uwaterloo.ca/news

Joanna Aikem
Managing Director, Climate Resilient Infrastructure, Intact Center on Climate Adaptive
University of Waterloo
514-268-0873 | [email protected]

Bailey Church
National Leader, Public Accounts Advisory
KPMG Canada
613-212-3698| [email protected]

Roy Brooke
executive director
Municipal Natural Assets Initiative
250-896-3023 | [email protected]

CBJ Newsmaker

But not yet on the balance sheet, the Canadian Business Journal

Source link But not yet on the balance sheet, the Canadian Business Journal

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