Accounting for Biodiversity

Michael Jones, Michael Jones

• Publisher: Routledge
• Year: 2014
• ISBN:
  9781136222962
• Edition: 1
• Topic: Commerce
• Subtopic: Comptabilité

'Biodiversity' at its simplest, refers to the variety of species inhabiting Planet Earth. It is essential to the well-being of the planet. There is now a scientific consensus around the current ongoing crisis in biodiversity arising from both climate change and human activities. Experts believe we are in the middle of a mass extinction of biodiversity with devastating consequences for our planet.

Accounting for Biodiversity explores the need for companies to actively protect, conserve and improve biodiversity within their sphere of operation. The 14 chapters written by a selected team of experts investigate the ways in which companies are embracing their responsibility through a variety of biodiversity initiatives and innovative models designed to improve the recording, reporting and valuing of biodiversity. Global case studies look at biodiversity accounting in Africa, Asia, Australasia, Europe and South America. Overall, this book provides a comprehensive set of reflections on accounting for biodiversity and recommendations for the future.

This book is essential reading for all those interested in the contribution that accounting can make to the preservation of biodiversity. As we see increasing awareness of the importance of sustainability and ecological responsibility in business activity it is relevant and should prove informative to students, managers, accountants and those in business more generally. It is also important for all those interested in conserving biodiversity.

PART I

Introduction

1

ACCOUNTING FOR BIODIVERSITY

Rationale and overview

Michael Jones

The environment has traditionally been viewed as a free good by organisations, whether they be governmental or private. However, over the past few decades there has been a growing appreciation by the general public, governments and also, most recently, by corporations, that the environment plays a vital role in underpinning economic success at both the national, regional and corporate level. Broadly speaking, this awareness dates from the Kyoto Protocol and was initially concerned with climate change caused by increased levels of carbon in the atmosphere. However, more recently, attention has also turned to biodiversity. For example, 2010 was deemed the International Year of Biodiversity. There was a meeting of the United Nations in Nagoya, Japan, attended by politicians, governmental organisations and businesses.

The term ‘biodiversity’ is not necessarily straightforward. It is short for biological diversity which was termed by Storch, Marquet and Brown (2007, p.1) as “the most fascinating phenomenon on Earth”. They maintain that biodiversity is now a sophisticated modern science. There have been estimated to be at least 100,000 recorded species with 10,000 new species being described every year (Lévêque and Mounolou, 2003). Jones and Solomon (2013) indicate that Spicer (2006) considered that there were more than 80 definitions. One of the most important of these was that agreed by the Convention on Biological Diversity in 1992: “[T]he variability among living organisms from all sources including [among other things] terrestrial, noise and other aquatic ecosystems and the ecological complexes of which they are a part [including] diversity within species and of ecosystems” (Spicer, 2006, p.2). A broad definition of biodiversity has also been proposed by Earthwatch (2002, p.11):

Biodiversity, as a term, refers to the variety of life on earth … it includes the vast array of genetically distinct populations within species, as well as the full variety of species and the communities, and ecosystems of which they are part. It is an embracive concept, referring to the entire ecosphere and all of its ecosystems and component living parts and the ecological and evolutionary processes that keep them functioning, yet ever evolving.

Another important definition is “the total variability of life on earth” (Heywood and Baste, 1995, p.5). Biodiversity, therefore, consists of flora and fauna, and the habitats they inhabit. There are thus two ways in which to look at it. The bottom-up approach focuses first on flora and fauna and the ecosystems approach takes a more holistic perspective and focuses first on ecosystems. Ecosystems are in turn connected to ecosystems services. These are varied and include four broad servicing streams: provisioning services, cultural services, support services and regulating services (Barbier et al., 2009, p.248).

The concern with biodiversity stemmed from a realisation that climate change would lead to habitat change and consequently biodiversity loss. Moreover, it was appreciated that human activity, as well as causing climate change, was also causing biodiversity depletion and extinction through other activities, such as habitat destruction and degradation, pollution, fishing and hunting. This has stimulated a debate about the importance of biodiversity from both an anthropocentric (i.e. nature has a value to human beings) and non-anthropocentric (i.e. nature has a value of itself) viewpoint. Biodiversity is now widely regarded as an essential underpinning of not only economic activity and well-being, but also it is appreciated that the destruction of biodiversity leads to a reduction in the human quality of life.

The aim of this book is four-fold. First, it aims to build on the prior limited work on biodiversity in the accounting area. This will extend and develop the theoretical and practical knowledge of biodiversity in the accounting domain. Second, it aims to provide, in a single volume, a summary of different aspects of biodiversity both theoretical and practical. This will provide a reference point for accounting researchers and others who might want to know more about biodiversity. And, third, it seeks to develop a body of knowledge about accounting biodiversity and thus demonstrate that not only is biodiversity relevant to accounting, but that accounting potentially can offer solutions to the biodiversity problems that the world faces. We hope, therefore, to demonstrate that there is no need for accounting and accountants to be passive bystanders in confronting one of the most fundamental problems that the planet faces, but that they can be active participants. They can contribute not only individual skills and knowledge in the field of recording, assurance and financial communication, but they can also collaborate with other interested groups such as governments, NGOs, naturalists and companies to provide integrated interdisciplinary solutions to the problems facing the planet in terms of the degradation of habitats and the loss and erosion of biodiversity. Fourth, we hope that this book will encourage research into the recording, valuing and reporting of biodiversity data by organisations. In particular, we hope it will encourage experimentation into different biodiversity accounting models.

This book was originally designed by Mike Jones and Jill Atkins. Both are researchers in accounting and corporate governance particularly in the environmental aspects. They, therefore, approached colleagues who they knew were active either in social and environmental accounting or were known to be interested in biodiversity or who had published before in related areas. The result was that authors agreed to contribute. We are very grateful for their help and support, without which this book would not have been possible.

It is fair to say that, with some rare early exceptions (e.g. Jones, 1996, 2003; Houdet, 2008; Houdet et al., 2009), both practitioners and academic accountants have generally not recognised the importance of biodiversity. However, recently there has been an increased awareness of biodiversity’s importance (e.g. Jones, 2010; Jones and Solomon, 2013). This is perhaps exemplified in a special issue of Accounting, Auditing and Accountability that has recently been published. This issue contained seven papers that focussed on biodiversity. Jones and Solomon (2013) set the scene for the special issue. They point out that “the erosion of the world’s biodiversity is widely recognised as one of the greatest current threats to the planet” (p.1). Biodiversity is important from both anthropocentric and non-anthropocentric perspectives. It thus provides not only a well of essential resources for human beings (such as recreational,¹ medicinal, food, water and the foundation for many industrial activities, e.g. wood for furniture and construction (anthropocentric)) but also has an intrinsic worth. It is valuable in its own right from a moral and ethical standpoint (non-anthropocentric). However, unfortunately we are in the middle of a wave of extinctions.

While it is true that by their very nature species evolve and some die out, the current rate of extinction is severe. Also, most of the current extinction appears to be caused by human activity. Biodiversity is under threat from human-induced change (Hester and Harrison, 2007). We are not only directly over-exploiting the world’s resources through activities such as fishing, but also indirectly through activities such as pollution. We are also degrading wildlife habitats through, for example, agricultural practices, deforestation or the introduction of alien species. Human transformations are the main reasons for the erosion of biodiversity (Lévêque and Mounolou, 2003). As Jones and Solomon (2013, p.674) state: “The rapid loss of species is currently estimated by experts to be between 1,000 and 10,000 times higher than the natural extinction rate.” Flora and fauna are at threat right across the globe. If we take the UK as an example, David Hill in 2005 commented that since 1945 the UK has lost over 50 per cent of its ancient lowland woodlands, 150,000 miles of hedgerow, 95 per cent of its traditional hay meadows, 80 per cent of chalk down-land and 80 per cent of wetland fens and mires. As a result, this has “given rise to massive losses in some, once very common farmland birds: in the past 30 years 40% of Song Thrushes, 54% of Yellowhammers, a staggering 87% of Starling and 90% of Corn Bunting has disappeared” (Hill et al., 2005, p.xi).

Despite the importance of biodiversity, Jones and Solomon point out that there has been a dearth of research into biodiversity particularly in accounting and economics. They provide a four-fold framework which problematises accounting for biodiversity: philosophical and scientific problems; accountability problems; technical accounting problems; and problems of accounting practice. The philosophical and scientific problems include the problem of defining biodiversity (ecosystem approach or not) and the problem of extinction. Accountability problems include whether we should account for biodiversity and the problem of what is the role of industrial corporations and individuals.

All organisations and individuals are accountable for their actions. Reporting biodiversity makes visible what was previously invisible and thus raises the profile of biodiversity. Accounting for biodiversity is a vital part of organisational stewardship and legitimacy. Accountants have a particular skill in collecting, organising and reporting data which makes them potentially particularly valuable in this process.

The two technical accounting problems are the extent to which conventional accounting is suitable for accounting for biodiversity and how to devise ways to account for, measure, value and report diversity. This book is particularly concerned with this dimension of accountability. Finally, the problems of accounting practice involve the assessment of current biodiversity accounting practice and of making recommendations for future practice and future research.

The six papers in the special issue dealt with different aspects of these problems. Cuckston (2013) and Siddiqui (2013) investigated biodiversity in tropical areas. Cuckston’s study (2013) was based in Africa in the Kasigau Corridor. He looked at the implications that the United Nations Reducing Emissions from Deforestation and Forest Degradation Program (REDD) had on conservation and biodiversity. Twenty per cent of greenhouse gas emissions are caused by deforestation. He argued that the program objectifies biodiversity and brings tropical forest diversity into financial accounting calculations. This could potentially alter humankind’s economic relationship with flora and fauna. Siddiqui (2013) took a different approach. Using the Sundarbans, the world’s largest mangrove forest, he conducted an archival study using Jones’ (1996, 2003) natural inventory model. Like the Kasigau Corridor, the Sundarbans is endowed with rich biological diversity and is one of the areas in the world most in need of protection. The natural inventory model is outlined in Chapter 3. It seeks to provide a comprehensive inventory model with which one can assess the quality and quantity of habitats and biodiversity. It is designed for use by any private or public organisation. Siddiqui prepared a Level 1 habitat statement, a L...

Table of contents

• Cover Page
• Half Title Page
• Title Page
• Copyright Page
• Contents
• List of figures
• List of tables
• Notes on contributors
• Foreword
• Part I Introduction
• Part II Theoretical framework
• Part III Practical applications
• Part IV Alternative perspectives
• Part V Conclusion