蓝莓视频

As Canada prepares to unveil its National Adaptation Strategy at COP27 and to host the COP15 biodiversity conference in Montreal, nature is still assigned a value of zero in our financial and accounting systems.听

, from听the University of 蓝莓视频鈥檚听, KPMG, and the Municipal Natural Assets Initiative argues for a revamp of accounting rules to safeguard natural resilience.

The services nature provides Canadians are not routinely valued in investment decisions, asset 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 urges G20 countries to triple their investment in nature-based solutions by 2030.

鈥淲etlands, forests, saltmarshes and grasslands aren鈥檛 only vital to biodiversity,鈥� said Mike Pedersen, chair of Business Development Bank of Canada, corporate director and chair of Nature Conservancy of Canada. 鈥淭hey are our front-line allies in reducing the impacts of flooding and erosion, extreme heat and drought, as well as removing carbon emissions to slow down climate change. The value of these services makes nature a sound economic driver. We need an accounting system that recognizes this reality.鈥�

COP27 is a key opportunity for Canada to scale up its commitment to working with nature to reduce climate risks.听

鈥淭his is an opportunity not to be missed,鈥� said Joanna Eyquem, managing director of Climate Resilient Infrastructure at 蓝莓视频鈥檚 Intact Centre. 鈥淎 national adaptation strategy that does not attach value to the critical services nature provides would be fundamentally flawed.鈥�

As the report states, the good news is that more than 90 local governments across Canada are taking matters into their own hands. These communities are already identifying and valuing natural assets that provide services to their citizens, such as the role of wetlands soaking up stormwater and maintaining good water quality and the role of trees offering shade to reduce urban heat and maintain good air quality. The glitch is that financial reports cannot reflect the values economists identify due to Canada鈥檚 accounting rules. Both the Canadian Public Sector Accounting Board and the International Public Sector Accounting Standards Board (IPSASB) have projects underway to look at ways to address this shortcoming.

鈥淔or accountants, leaving out natural assets means we are completely missing a large proportion of benefits, as well as potential liabilities,鈥� said Bailey Church, lead for Public Sector Accounting Advisory at KPMG Canada. 鈥淚t is effectively a huge systematic oversight.鈥�

The report points to three pathways to take now to mainstream recognition of the role and financial value of services nature provides:听

• Allow for the inclusion of natural assets from public sector financial statements, as currently being considered by the Canadian Public Sector Accounting Board, which sets standards for public sector accounting.
• Establish national guidelines and standards for identifying and valuing natural assets in Canada.
• Engage Canadian financial institutions and organizations in setting frameworks and metrics that account for the value of nature, guide private-sector investments to protection and restoration opportunities, and enable the measurement of the return on investment in nature.

Internationally, countries鈥� including the United Kingdom, South Africa and the United States鈥� have taken steps to value nature in their national accounting systems. With motivated local governments and a wealth of natural assets, this report shows that Canada can still be an agenda setter rather than an agenda taker in this space.

鈥淐anada鈥檚 local governments are showing how understanding the value of services from nature can steer action on the ground to manage natural assets effectively,鈥� said Roy Brooke, executive director of Municipal Natural Assets Initiative. 鈥淯ltimately, it鈥檚 the action that counts, not just assigning a value.鈥澨�

Currently, nature is effectively assigned a financial value of zero, with little incentive for effective management. This report argues that this must change if Canada is serious about investing in nature, the basis of our economy.

Contact details:

Ryon Jones

Media relations manager
University of 蓝莓视频听

226-339-0894 触听触听

Joanna Eyquem

Managing Director, Climate Resilient Infrastructure, Intact Centre on Climate Adaptation

University of 蓝莓视频听

514-268-0873 触听joanna.eyquem@uwaterloo.ca
听

Bailey Church

National Leader, Public Sector Accounting Advisory

KPMG Canada

613-212-3698触听bchurch@kpmg.ca
听

Roy Brooke

Executive Director

Municipal Natural Assets Initiative

250-896-3023听触听royb@mnai.ca