With the factual results at hand, it is now important to interpret and test them.Given the interpretation and reliability of the results, the company can start to take action, both internally and externally.
Interpret and test the results
By testing the key assumptions, identifying who is affected, collating results, validating and verifying the assessment process and results and reviewing the strengths and weaknesses of the assessment, a company can interpret and test the results of its natural capital account.
Natural Capital Coalition (2016a), p. 95.
Take action
Application
First of all, when taking action, one must apply and act upon the results of the NCA. Such applications include internal decision-making such as aggregating risks and possibilities, comparing options (e.g. in investments in infrastructural projects), sustainable procurement and supply chain management, but also more external applications; for instance, NCA results can serve as material input in mergers and acquisitions (M&A), as a step towards regulatory compliance or as a basis for evaluating ‘shared value’.
Natural Capital Coalition (2016a), p. 94-110.
On sustainable procurement: DuurzaamDoor (2014), p. 18.
Communication
The next step is communicating. Internal communication consists in providing decision-makers with the knowledge needed to inform decisions and sharing information with internal stakeholders.
Reporting and disclosure are among the most important ways of communicating externally. Integrated Reporting (stylized <IR>) is an evolution of corporate reporting, which demonstrates how various forms of capitals represent all the resources and relationships organizations utilize to create value. Organizations such as the IIRC, GRI, IRIS and the SASB help organizations integrate the social and environmental impacts of business activities into financial reporting.
Another way of reporting is through an environmental profit and loss account (EP&L): a monetary valuation and analysis of a company’s impacts on natural capital, including possible compensations and advantages of sustainable usage of natural capital. NS (Dutch railway company), Puma and AkzoNobel have all published EP&Ls for (parts of) their operations, sometimes extending to the entire value chain.
Finally, certification can help in reporting, transparency, and PR. The Ecolabel Index is a global directory of ecolabels, currently tracking 459 ecolabels in 197 countries, and 25 industry sectors. In the Netherlands, MilieuCentraal offers an oversight of certificates, including individual scores on various indicators.
Natural Capital Coalition (2016a), p. 94-110.
Business @ Biodiversity Workstream 1 (2014), p. 26-27.
Read more on the activities of Puma, NS en AkzoNobel.
For more information on sustainability certifications and labels, visit the website of Ecolabel Index.
Other sources for sustainability reporting are OECD, ISO and the UN Global Impact.
