Unlocking nature's value: Canadian communities support push for consistent financial reporting on natural assets

Core Insights - The article discusses the new guide "Getting Nature into Financial Reporting," which aims to help local governments in Canada integrate natural assets into their financial reporting to promote sustainable growth and prepare for upcoming accounting standards [1][4]. Group 1: Importance of Natural Assets - Natural assets such as wetlands, rivers, and forests are increasingly recognized as vital infrastructure that provides essential services to communities, including flood mitigation, temperature regulation, and carbon storage [2]. - The absence of natural assets in financial reporting leads to undocumented loss and degradation of their services, highlighting the need for their inclusion in financial statements [3]. Group 2: Local Government Initiatives - Over 150 communities in Canada are actively working to identify, assess, and manage their natural assets, with major cities like Toronto and Montreal already incorporating this information into their financial reports [5]. - The new guide aims to address the variability in disclosures due to the lack of Canadian standards, providing a framework for consistent reporting [5][7]. Group 3: Metrics and Reporting Framework - The guide outlines a suite of metrics for reporting on natural assets, including identification of ecosystems, detailed location data, assessment of ecosystem condition, metrics for ecosystem services, and financial valuation of these services [6][7]. - Local governments can adopt a phased approach to reporting, starting with basic descriptive information and progressing to more sophisticated financial valuations [7]. Group 4: Alignment with International Standards - The guide builds on international guidance from organizations such as the United Nations and the Taskforce on Nature-related Financial Disclosures, anticipating new standards from the International Public Sector Accounting Standards Board [8]. - The integration of nature into financial reporting is seen as a crucial step in transforming the financial system to recognize the value of nature's services [9].