ISO/FDIS 14054

ISO/TC 207/SC 1
Secretariat: BSI
Date: 2025-05-07
Natural capital accounting for organizations — Principles,
requirements and guidance
FDIS stage
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Contents
Foreword . v
Introduction . vi
1 Scope . 1
2 Normative references . 1
3 Terms and definitions . 1
3.1 Terms related to natural capital . 1
3.2 Terms related to natural capital account . 3
3.3 Terms related to natural capital accounting . 7
4 Principles . 7
4.1 General . 7
4.2 Rigour . 7
4.3 Completeness . 8
4.4 Consistency . 8
4.5 Credibility . 8
4.6 Relevance . 8
4.7 Transparency . 8
5 Process of preparing a natural capital account . 8
5.1 General . 8
5.2 Define the purpose of the natural capital accounting. 9
5.3 Define the organization . 10
5.4 Select the scope of natural capital account . 10
5.5 Select the type of natural capital account . 11
5.6 Natural capital register. 12
5.7 Undertake materiality assessment . 12
5.8 Identify interested parties and the extent of their involvement . 13
6 Collect data and conduct data quality assessment . 14
6.1 General . 14
6.2 Attribution and apportionment . 15
6.3 Monetary valuation . 16
6.4 Discounting of monetary values . 16
7 Natural capital income statement . 17
7.1 General . 17
7.2 Increases in natural capital and associated natural capital benefits . 18
7.3 Decreases in natural capital and associated natural capital benefits . 18
7.4 Completed natural capital income statement . 18
8 Natural capital balance sheet . 19
8.1 General . 19
8.2 Natural capital risk register . 21
8.3 Physical flow account . 21
8.4 Monetary flow account . 21
8.5 Cost schedules . 22
8.6 Completed natural capital balance sheet. 23
9 Documentation, interpretation and integration . 26
9.1 Documentation . 26
9.2 Interpretation . 28
9.3 Integration . 30
Annex A (informative) Graphical representations in natural capital accounting . 31
iii
Annex B (informative) Examples of an organization’s purpose for natural capital accounting . 34
Annex C (informative) Illustrating the choice of natural capital account and scope . 36
Annex D (informative) Monetary valuation context and background . 38
Annex E (informative) Hypothetical case study of a natural capital income statement and a
natural capital balance sheet of a farm . 40
Bibliography . 45

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Foreword
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This document was prepared by Technical Committee ISO/TC 207, Environmental management,
Subcommittee SC 1, Environmental management systems.
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v
Introduction
This document presents the terminology, principles, requirements and guidance used to prepare natural
capital accounts to ensure the process is transparent, repeatable and generates information that is useful for
decision-making.
By combining financial, environmental and socio-economic information, natural capital accounting reveals the
value of nature to an organization or its value chain, and the rest of society, and the value of the impacts or
dependencies on nature from an organization’s activities or those attributed to its value chain. Both market
and non-market values are included in natural capital accounts, making the best use of qualitative,
quantitative, and monetary methods of measurement.
A natural capital account is prepared for internal use and can also be reported externally. Users of natural
capital accounts can also identify the links to their financial accounts and disclosures.
The process of providing comprehensive and transparent information can help an organization:
— identify its impacts and dependencies, and that of its value chain, on natural capital, and the associated
risks and opportunities;
— communicate information and implications within the organization and with external interested parties;
— conduct scenario analysis to support strategy, risk management and operational decisions;
— consider the options for investing in natural capital or to manage impacts and dependencies on natural
capital;
— monitor natural capital and the impacts or dependencies on nature from an organization’s activities or its
value chain over time, including the effectiveness of the organization’s actions.
This document is intended to be used by those who will be preparing the natural capital accounts. These can
be environmental and sustainability professionals, accountants, economists and others, with sufficient
ecological, economic and other relevant knowledge, working in collaboration.
Natural capital accounts aim to provide information to managers of organizations, and interested parties such
as investors, auditors, assurance and certification bodies, regulators, policy makers, non-governmental
organizations, customers, and the wider public. The process of preparing natural capital accounts can be as
informative as the results presented in the natural capital accounts.
A group of organizations that depend on the same natural capital (e.g. natural capital in a specific location such
as a water basin), or that are considering collaborating to change their impacts, may prepare joint natural
capital accounts specific to the shared natural capital. The information used to create the natural capital
accounts including their supporting schedules can come from different sources such as financial accounts,
environmental management systems, environmental, social and governance analysis, and other economic,
social and environmental analyses undertaken by the organization, or academic or official publications (e.g.
national or subnational natural capital accounts) or grey literature.
This document foresees that the process for preparing natural capital accounts includes scope choices, data
from different sources and of different quality, and assumptions.
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