Welcome to IFAC’s International Auditing and Assurance Standards Board (IAASB) eNews.

In This Issue:

1. IAASB June Meeting
2. Auditor Reporting Exposure Draft
3. Auditor Reporting in the News
4. Post-Implementation Review of the Clarified ISAs
5. IAASB Chairman Speaks at CReCER 2013
6. IAASB 2012 Annual Report
7. Constructive Cooperation for International Standards
8. Other Relevant Standard-Setting Board and IFAC Initiatives
9. The IAASB is Hiring
10. Share IAASB eNews with Your Colleagues
11. World Congress of Accountants 2014 to be Held in Rome; Sponsorship Opportunities Available

1. IAASB June Meeting

The IAASB met June 24-28, 2013, in New York, USA. Please visit the IAASB Meeting Page for relevant agenda items. Meeting highlights and an audio podcast are also available. For more detailed information about IAASB projects, please refer to the project summaries under Active Projects.

2. Auditor Reporting Exposure Draft

At its June Meeting, the IAASB approved Reporting on Audited Financial Statements: Proposed New and Revised International Standards on Auditing (ISAs). This exposure draft includes proposed new ISA 701, Communicating Key Audit Matters in the Independent Auditor’s Report, proposed revised ISA 700, Forming an Opinion and Reporting on Financial Statements, and revisions to ISAs 260, 570, 705, and 706. Example reports illustrating various circumstances are included.

The Staff of the IAASB has provided additional, non-authoritative documents: an At A Glance; guidance to audit firms for field-testing proposed ISA 701; and two supplements to illustrate the changes made to ISA 700 and ISA 705 to assist those translating the exposure draft.

Comments are due by:  November 22, 2013.

3. Auditor Reporting in the News

The IAASB’s Auditor Reporting exposure draft has been highlighted in a number of news articles, including:

• The Accountant
• Bloomberg BNA
• CFO.com
• CorporateCounsel.net (podcast)
• Financial Executive

4. Post-Implementation Review of the Clarified ISAs
The IAASB recently released its final report on the Post-Implementation Review of the Clarified ISAs. This report summarizes feedback and the main themes that have emerged, and will be an important input to the IAASB’s future planning process, including its 2015–2019 strategy deliberations.

5. IAASB Chairman Speaks at CReCER 2013

In “The Evolving Role of Auditors and Auditor Reporting,” at CReCER in Cartagena, Colombia (August 2013), Prof. Arnold Schilder highlighted key aspects of the auditor reporting proposals.

6. IAASB 2012 Annual Report

The IAASB’s 2012 Annual Report, Responding to the Needs of an Interconnected World, highlights the board’s work in the public interest to enhance the quality and consistency of practice throughout the world, and thereby strengthen the public’s confidence in the global auditing and assurance profession. The report covers new and enhanced international standards issued by the IAASB during the year, the board’s progress on its current standard-setting projects and related initiatives, and its outreach activities to obtain input on its deliberations and to keep stakeholders informed of its activities. 

7. Constructive Cooperation for International Standards
In May, the IAASB joined IFAC and the International Accounting Standards Board (IASB) to gather more than 70 representatives from over 10 national organizations from former Soviet republics in Europe and Central Asia in London at a two-day conference. Hosted by the Association of Chartered Certified Accountants (ACCA), the event brought together organizations with responsibilities relating to the adoption or implementation of ISAs and IFRS.

The IAASB and IASB have been actively liaising on other initiatives of mutual interest. In March 2013, the IAASB submitted further comments concerning the auditability of recent IASB exposure drafts. The IAASB also welcomed IASB and IASB Staff representatives to its June 2013 Board meeting to discuss current developments, including in relation to going concern

8. Other Relevant Standard-Setting Board and IFAC Initiatives

Initiatives of IFAC committees and other independent standard-setting boards supported by IFAC may be of interest to those who follow the work of the IAASB, including the following:

• Kristian Koktvedgaard Appointed Chair of Ethics Board Consultative Advisory Group
• IPSASB Publishes Public Sector Conceptual Framework Exposure Draft
• IFAC Global Forum Focuses on Innovations to Support the Growth of Small Businesses and the Accountants That Serve Them
• IFAC Signs Strategic Agreement with The IIA
• Integrating ASEAN Capital Markets: Need for Strong Financial Reporting Environment and Building Investor Confidence

9. The IAASB is Hiring

The IAASB has open positions within its technical staff team. Interested individuals are invited to submit their resumes to: jobs@ifac.org. Further information about the positions is available on the IAASB home page.

10. Share IAASB eNews with Your Colleagues

The IAASB issues regular eNews updates to keep you apprised of the board's activities and recent publications. Please forward this eNews to any interested colleagues and let them know they can register and subscribe to this and other eNews bulletins on the IFAC website.

11. World Congress of Accountants 2014 to be Held in Rome; Sponsorship Opportunities Available

The next World Congress of Accountants (WCOA) will be hosted by the Consiglio Nazionale dei Dottori Commercialisti e degli Esperti Contabili (CNDCEC) in Rome, Italy in 2014. Themed 2020 Vision: Learning from the Past, Building the Future, the 2014 WCOA will be held November 10-13 at the Auditorium Parco della Musica. More than 4,000 professionals from all over the world will convene at this IFAC event, which is held every four years. WCOA 2014 will look back to explore the evolution of the accountancy profession and forward to showcase the innovations that will shape the future of the profession.

The WCOA also provides a global platform for organizations and firms to share their projects and visions via various sponsorship opportunities. For more information, please contact info@wcoa2014rome.com or Dimarco@wcoa2014rome.com.

Thank you for subscribing to the eNews from the International Public Sector Accounting Standards Board (IPSASB). This edition provides a summary of decisions made at the IPSASB’s meeting held June 17-20, 2013, in Toronto, Canada. Please visit the IPSASB Meeting Page for the meeting highlights and relevant agenda items.

An audio podcast of Meeting Highlights is also available.

1. Reporting on the Long-Term Sustainability of an Entity’s Finances
2. Financial Statement Discussion and Analysis
3. Reporting Service Performance Information
4. Governance and Oversight Update
5. Relationship to IASB Conceptual Framework and Development of the Preface to the Conceptual Framework
6. IPSAS 6-8 Update
7. First-Time Adoption of Accrual Basis IPSASs
8. Government Business Enterprises
9. Next Meeting

1. Reporting on the Long-Term Sustainability of an Entity’s Finances

The IPSASB reviewed a further version of draft Recommended Practice Guideline (RPG), Reporting on the Long-Term Sustainability of an Entity’s Finances. This version reflected the direction at the March 2013 meeting that capacity and vulnerability are aspects of each of the three dimensions of long-term fiscal sustainability: service, revenue and debt. The IPSASB directed that a definition of the term “current policy assumptions” be inserted and other minor modifications be made. The IPSASB approved RPG 1 for issuance as a final pronouncement; it was published on July 24.

2. Financial Statement Discussion and Analysis

The IPSASB reviewed a further version of draft RPG, Financial Statement Discussion and Analysis, including a substantially modified Basis for Conclusions. The RPG provides guidance to public sector entities for preparing and presenting financial statement discussion and analysis, which will assist users in understanding the financial position and financial performance described by the general purpose financial statements.

The RPG recommends that financial statement discussion and analysis include:

• An overview of the entity’s operations and the environment in which it operates;
• Information about the entity’s objectives and strategies that relate to the financial statements;
• An analysis of the entity’s financial statements, including significant changes and trends; and
• A description of the entity’s principal risks and uncertainties that relate to the financial statements, an explanation of changes in those risks and uncertainties since the last reporting date, and its strategies for bearing or mitigating those risks and uncertainties.

The IPSASB approved RPG 2 for issuance as a final pronouncement; it was published on July 26.

3. Reporting Service Performance Information

The IPSASB considered issues with respect to development of a draft RPG, Reporting Service Performance Information, directing that it should provide a mixture of guidance on decisions and identification of minimum characteristics for reporting service performance information. Additionally, the IPSASB recommended the RPG acknowledge that some selection of services for reporting information will always be necessary. The RPG should, therefore, provide guidance on how this should be done and on relevant factors or criteria for such selection. It should also provide guidance on which types of performance indicators are chosen—inputs, outputs, outcomes, efficiency indicators, and/or effectiveness indicators. The guidance should:

• Tie the choice of indicators back to objectives;
• Encourage reporting that goes beyond outputs to outcomes; and
• Note that the circumstances in which an entity is reporting could be important.

With respect to information organization, the RPG should focus on principles rather than choices between particular approaches to information organization. Information organization will need to be appropriate for the types of services reported, their outcomes, and objectives.

An Exposure Draft (ED) of an RPG will be further developed for consideration at the IPSASB’s September 2013 meeting.

4. Governance and Oversight Update

The IPSASB received an update from the observers from the Organisation for Economic Co-operation and Development (OECD) and the World Bank regarding the formation of the IPSASB Governance Review Group, including a report on their first meeting, held May 31, 2013, in Paris, France. The Review Group will be chaired by representatives of the International Monetary Fund (IMF), the OECD, and the World Bank and its members will include the Financial Stability Board (FSB), International Organization of Securities Commissions (IOSCO), and International Organisation of Supreme Audit Institutions (INTOSAI). A consultation paper is planned for September, with final recommendations anticipated during the first half of 2014. These recommendations will be reported to the G-20 and the FSB.

The review will consider oversight arrangements as well as the broader questions of IPSASB governance and measures to enhance the perceived relevance, quality, and legitimacy of International Public Sector Accounting Standards (IPSASs).

5. Relationship of IPSASB Conceptual Framework to IASB Conceptual Framework and Development of the Preface to the Conceptual Framework

The IPSASB discussed the relationship of the Conceptual Framework to the International Accounting Standards Board (IASB)’s Framework project in light of the anticipated issue of an integrated Discussion Paper by the IASB; it was released in July 2013. The IPSASB reaffirmed that the Conceptual Framework is a critical project for the public sector, and neither an interpretation of the IASB’s current and evolving Framework nor an International Financial Reporting Standards (IFRS) convergence project.

IPSASB staff will review the IASB's Discussion Paper in order to avoid differences in definitions and terminology that are unwarranted by public sector circumstances.

The IPSASB also agreed the reason why the IPSASB Framework will differ from the IASB Framework should be communicated clearly. As part of this communication, the IPSASB agreed to publish The Preface to the Conceptual Framework for General Purpose Financial Reporting by Public Sector Entities as a Preliminary Board View in July 2013.

6. IPSAS 6-8 Update

At previous meetings, the IPSASB has considered a range of issues associated with the development of the five EDs to be issued as part of this project. The June meeting focused on which reporting entities should be required to comply with the consolidation requirements in the ED based on IFRS 10, Consolidated Financial Statements.

The IPSASB considered the IASB’s exception from consolidation for investment entities. Although the IPSASB noted that relatively few public sector investment entities are expected to be applying IPSASs, the IPSASB agreed to propose that investment entities be required to recognize their controlled investments at fair value, as required by IFRS 10.

The IPSASB also considered a proposal for optional whole of government consolidated financial statements, in conjunction with mandatory statistical sector reporting. The IPSASB agreed not to proceed with this proposal, although it noted that the interaction between IPSAS 18, Segment Reporting, and IPSAS 22, Disclosure of Financial Information about the General Government Sector, could be explored in the future and might form part of future work program public consultations.

The IPSASB directed staff to proceed with drafting an ED, based on IFRS 10, which:

• Requires that investment entities account for their controlled investments at fair value; and
• Sets out the possibility of permitting the retention of fair value investment entity accounting by a non-investment controlling entity.

The IPSASB is expected to vote on the EDs at its September meeting.

7. First-Time Adoption of Accrual-Basis IPSASs

The IPSASB discussed an analysis of the transitional accounting issues related to IPSAS 28, Financial Instruments: Presentation; IPSAS 29, Financial Instruments: Recognition and Measurement; and IPSAS 30, Financial Instruments: Disclosure, and provided direction to staff on various aspects.

The IPSASB agreed to grant a first-time adopter a three-year relief period for the recognition of financial instruments that were not recognized under its previous basis of accounting. A first-time adopter that recognized financial instruments under its previous basis of accounting may adopt a three-year relief period for the measurement of such financial instruments. The board further agreed that all disclosure requirements relating to financial instruments should be applied prospectively as and when the financial instruments are recognized and/or measured.

The IPSASB debated various overarching issues that impact the finalization of the proposed ED and agreed that a first-time adopter should only apply deemed cost where the cost information of the asset is not available.

The IPSASB reviewed the first draft of the proposed ED and agreed that an updated version should be presented at the September 2013 meeting.

8. Government Business Enterprises

The IPSASB further discussed the Government Business Entities (GBEs) project, commencing with a history of the term, which dates back to 1989. The survey of board members in December 2012 revealed a number of issues with the definition of GBEs, ranging from the inclusion of entities that have a full cost recovery rather than profit objective; the meaning of not being fully reliant on government funding to be a going concern; the consistency in interpreting the definition across jurisdictions; whether the control criterion is appropriate; and whether a definition based on services or objectives would be better.

The IPSASB noted the wide spectrum of entities being treated as GBEs across jurisdictions and considered four options on the way forward:

• Not to define GBEs, leaving jurisdictions to make their own decisions on which entities are profit–oriented and should apply IFRS or national private sector GAAP;
• Clarify the existing definition to make it easier to apply and achieve greater consistency;
• Narrow the existing definition to seek to reduce the current diversity in terminology and practice; or
• Redefine GBEs based on services or objectives.

The IPSASB directed staff to prepare a consultation paper proposing the characteristics of entities which jurisdictions should consider when deciding whether to apply IPSASs to public sector entities.

9. Next Meeting

The next IPSASB meeting will be held in Toronto, Canada, Sept. 16-19, 2013. Members of the public may register to observe the meetings. Registration will close Sept. 9.

Welcome to IFAC’s Professional Accountants in Business (PAIB) Committee eNews.

In this Issue:

Governance
1. Public Sector Governance Consultation Draft Published by IFAC, CIPFA
2. ICAEW: What are the Principles of Corporate Governance?

Internal Control and Risk Management
3. Revised COSO Framework: IFAC Review Available for Publication
4. Sharing Best Practice on Risk Management and Internal Control

Financial Reporting
5. IFAC Responds to IIRC Consultation Draft on Integrated Reporting
6. GRI Publishes Survey Review of Integrated Reports

Sustainability
7. World Forum on Natural Capital
8. ICAS Announces Sustainability in Business Essay Competition
9. NYSE Joins UN Sustainable Stock Exchanges Initiative

SMP News
10. SMP Quick Poll: Sustainability Services on the Rise

Next PAIB Committee Meeting
11. Next Meeting of Professional Accountants in Business Committee

Governance

1. Public Sector Governance Consultation Draft Published by IFAC, CIPFA

IFAC and the Chartered Institute of Public Finance and Accountancy (CIPFA) issued a Consultation Draft, Good Governance in the Public Sector, to promote the development of robust governance. The Consultation Draft looks to establish a benchmark for good governance in the public sector at both the government and individual public sector entity levels. The Consultation Draft was developed with input from representatives of relevant international organizations. Public sector representatives and other public sector stakeholders are encouraged to respond to the proposed framework to help improve its applicability to public sector entities at all levels internationally. Comments are requested by September 17, 2013.

IFAC member and regional organizations are invited to publish the supporting article, “New Guidance Aims to Improve Public Sector Governance,” in their journals, newsletters, website, and other forums. The article can also be tailored to suit the needs of each organization and membership. Email permissions@ifac.org for permission to translate or reproduce.

2. ICAEW: What are the Principles of Corporate Governance?

Governance is also discussed in What are the Overarching Principles of Corporate Governance? from the Institute of Chartered Accountants in England and Wales (ICAEW). The thought piece encourages corporate boards to focus on a set of simple but fundamental principles of corporate governance. It also outlines five short, purposeful, and aspirational overarching principles that apply to a wide range of companies. These principles should serve to remind corporate boards, and their stakeholders, what corporate governance should look like if a company is to meet its business purpose and other responsibilities.

Internal Control and Risk Management

3. Revised COSO Framework: IFAC Review Available for Publication

In response to the publication of the Committee of Sponsoring Organizations of the Treadway Commission (COSO)’s Internal Control-Integrated Framework in May (see PAIB Committee eNews May 2013 for details), IFAC has written a review discussing the changes in the new COSO publication and the work still to be done. “Revised COSO Framework: Improved but Further Adjustments Warranted” outlines recommendations COSO should take up in future revisions to make the Framework more relevant to a broader global community. This article is also available for publication by member bodies. Email permissions@ifac.org for permission to translate or reproduce.

4. Sharing Best Practices on Risk Management and Internal Control

IFAC staff recently gave a presentation on risk management, internal control, and the COSO Framework at the 94^th Annual Institute of Management Accountants (IMA) Conference in New Orleans, US. The presentation, made with J. Stephen McNally of the Campbell Soup Company, outlines some of the pitfalls many organizations face with their current systems of risk management and internal control. Vincent Tophoff, IFAC senior technical manager, and Mr. McNally also addressed the changes in the newly revised Internal Control-Integrated Framework from COSO.

The presentation:

• summarizes the most important pitfalls in current risk management & internal control (RM/IC) practice;
• provides insight into current thinking on risk management and internal control;
• outlines key concepts contained in the most important risk management and internal control guidelines;
• discusses the impact of these developments and approaches for organizations; and
• identifies and discusses other emerging trends related to risk management and internal control.

IFAC staff also recently gave a presentation on the effective integration of risk management and internal control, especially as it relates to the International Organization for Standardization (ISO)’s standard on risk management, ISO 31000 – Risk Management, at the Second International Conference on ISO 31000 in Toronto, Canada.

Financial Reporting

5. IFAC Responds to IIRC Consultation Draft on Integrated Reporting

IFAC responded to the landmark Consultation Draft of the International Integrated Reporting Framework, published in April by the International Integrated Reporting Council (IIRC). In its comment letter, IFAC recommends, for example, adjusting the Framework to encourage a principles-based, rather than a rules-based, approach to integrated reporting and advocates that it should be the individual organizations that determine their intended audiences, instead of the blanket assumption that integrated reports are primarily for providers of financial capital. The IIRC is now in the process of analyzing the 350 responses it received to the proposed Framework.

6. GRI Publishes Survey Review of Integrated Reports

The Global Reporting Initiative (GRI) released a new survey report reviewing different ways integrated reports are taking shape around the world. The Sustainability Content of Integrated Reports—A Survey of Pioneers looks at 756 reports published from 2010 to 2012 following GRI Guidelines and surveys 52 organizations that issued integrated reports during all three years. 

Sustainability

7. World Forum on Natural Capital

The World Forum on Natural Capital, an UN-backed event, will be held in Edinburgh, UK, November 21-22, 2013. The event will be the first major global conference devoted to putting an economic value on natural capital (additional information on natural capital is available in Special Edition eNews—Accounting for Natural Capital). Synergies between public and private sector natural capital accounts will be explored, as will the links with integrated reporting and the issues affecting different sectors. The conference is organized by the Scottish Wildlife Trust in association with the United Nations Environment Programme, World Business Council for Sustainable Development, International Union for Conservation of Nature, TEEB for Business Coalition, and the Wildlife Trusts. IFAC stakeholders are being offered a 10% discount on registration (promotional code IFAC10 when registering). Additional information, including the program, is available at www.naturalcapitalforum.com. Early bird registration closes September 12, 2013.

8. ICAS Announces Sustainability in Business Essay Competition

The Institute of Chartered Accountants of Scotland (ICAS) has announced its 2013 essay competition to encourage debate regarding sustainability in business. Entry is open to all accountants and students globally. Professionals and students in related fields are also encouraged to apply. Full details, including competition rules and topic details, can be found at https://icas.org.uk/sustainabilityprizeessay/. The competition, sponsored by Grant Thornton UK LLP, closes on September 30, 2013.

9. NYSE Joins UN Sustainable Stock Exchanges Initiative

The NYSE Euronext is the newest member of the United Nations’ Sustainability Stock Exchanges (SSE) Initiative. The initiative aims to “explore how exchanges can work together with investors, regulators, and companies to enhance corporate transparency on environmental, social, and corporate governance issues and encourage responsible long-term approaches to investment.” In announcing its participation, Duncan L. Niederauer, CEO of NYSE Euronext, said, "As the only carbon neutral global exchange group, we are proud to join the SSE initiative and partner with the UN and our industry to support best practices in corporate governance and transparency related to corporate sustainability. We lead by example by running our business in an environmentally responsible manner, and by leveraging the unique power of our platform and our NYSE Euronext community, we empower learning and collaboration within the broader corporate sector."

SMP News

10. SMP Quick Poll: Sustainability Services on the Rise

The latest IFAC SMP Quick Poll results showed that the vast majority, 73%, of the nearly 4,000 small- and medium-sized accounting practitioners (SMPs) surveyed are either currently providing or have plans to provide sustainability services to their clients, suggesting there is a sizable market for these services among the small businesses that SMPs typically serve. Results varied somewhat by size of practice and region. The larger the size of the SMP, the more likely it was to be offering sustainability services.

Next PAIB Committee Meeting

11. Next Meeting of Professional Accountants in Business Committee

The next meeting of the PAIB Committee will be hosted by the Chinese Institute of Certified Public Accountants (CICPA), October 14-15, in Beijing, China. It will be followed by a forum on October 16, 2013, at the CICPA offices. Additional information on the forum, which will be open to the public, will be made available in coming issues of eNews.

The IFAC Nominating Committee plays a vital role in establishing the expertise of the independent standard-setting boards, the IFAC Board, Compliance Advisory Panel, and IFAC committees by seeking out and identifying the best candidates for vacancies. Whether it is one of the independent standard-setting boards or an IFAC committee, the Nominating Committee examines nominations from around the world, analyzes experience and expertise, and considers diversity when recommending new members and leadership for the boards and committees, all while maintaining transparency and strict adherence to due process. The Nominating Committee, under the oversight of the Public Interest Oversight Board (PIOB), also strives to ensure sufficient nominations are received each year and helps professional accountancy organizations and other stakeholders establish an effective nominations strategy.

The Nominating Committee is comprised of two ex-officio members—the IFAC president and deputy president—and at least four non-ex-officio members, of whom no more than two can be IFAC Board members. There are currently two Board members on the committee—Ana Maria Elorietta and Japheth Katto—although during some years there have been none. For 2013, the non-Board members, or ordinary members, are Margaret Parker, Professor Judy Tsui, and Sir David Tweedie.

I asked committee members to share their experiences and thoughts on the work of the committee in order to increase the knowledge among our stakeholders of the work and diligence involved.

—Warren Allen, IFAC President

1. What made you interested in serving on the Nominating Committee?
   
   Ana Maria Elorrieta: Due to my accumulated knowledge of IFAC, I felt that I had a reasonable understanding of most of the needs at the board and committee level so I realized that I could contribute to the nominations process. Additionally, in so doing, I would be representing Latin America.
   
   Japheth Katto: I wanted to make a contribution to the leadership and governance of IFAC, its committees, and the independent standard-setting boards by being part of the selection of professionals serving on the boards and committees. In my view this is an important exercise as serving the public interest is the foundation of IFAC's mission.
   
   Margaret Parker: My member body contacted me to put my name forward. I was on a nominating committee in my state in Australia so was familiar with the overall requirements of a nominating committee at the local level.
   
   Sir David Tweedie: I believe passionately in global standards, whether they are in accounting, auditing, ethics, or education. If we are to gain acceptance for these standards, we need the very best people the profession can offer to draft them. I wanted to do my best to ensure that the [boards and] committees were filled by those who were respected thinkers in their particular specialisms and had an international outlook rather than being merely placemen.
    
2. Since you became a member, has your view of the Nominating Committee and its work changed? Has serving on the Nominating Committee been what you expected?
   
   Japheth Katto: I always knew that the committee played a very big role and that its job was not an easy one. However, I did not fully appreciate how intricate and complicated the process was, especially when you have many candidates who fit the criteria of "best person for the job."
   
   Margaret Parker: Serving on the committee has been much more than I expected. The rigor and concern for the public interest are foremost in the committee’s mind. I have also come to understand that the work of the committee is vital to the quality of volunteers on the boards and committees.
   
   The committee is very cohesive and cooperative, which adds to the overall enjoyment of the work. On a personal level, it has been a wonderful experience to be on an international committee where the members are from all over the world.
   
   Judy Tsui: I was pleasantly surprised to find out that the Nominating Committee has established such comprehensive and consistent procedures and processes for all the nominations. The PIOB observer, in particular, serves as a monitor of public interest.
   
   Sir David Tweedie: I have been astounded at the thoroughness of the work of the committee. It seeks to be scrupulously fair—it examines the CVs very carefully, then ensures that not one committee member has an undue influence in the result. I have found the work of the committee and its staff extremely professional—far exceeding anything else I have experienced with nominating committees.
    
3. The competition for membership on boards and committees is very high; how does the committee select the “best” candidates for positions?
   
   Ana Maria Elorrieta: This is really a very important activity. We first analyze the profile of the best candidate in accordance with the boards’ and committees’ needs. Then we analyze the CVs received and try to match one to the other. The analysis of the CVs is very detailed work performed individually by each Nominating Committee member, so when we discuss as a group, each member has a point of view on the best candidates. Then we complete our knowledge of the candidates through the interviews to provide the basis for the final decision. It is a very comprehensive process.
   
   Japheth Katto: In arriving at the best candidate for the position, the committee's guiding criteria is the candidate's knowledge, experience, and ability to add value to the board or committee. Before the final decision, other factors, such as geographical and sector (Big 4, small- and medium-sized practices, professional accountants in business, etc.) representation are taken into account. Clearly, it wouldn't be in the public interest if all or most members of a board or committee were from the Big 4 or one region. Diversity is important.
   
   Margaret Parker: The committee members read all the CVs submitted via the Call for Nominations. We also consider the requirements of the boards and committees for which we are recommending candidates. It is, therefore, important for nominees to include their experience relevant to the particular board in their CV. The committee members individually rank the nominees prior to our meeting. At our next face-to-face meeting, a technical voting system is used to rank the nominees who are then chosen for either telephone or face-to-face interviews.
   
   Committee members, together with board/committee chairs, conduct telephone interviews, gleaning the candidates’ experience of the work of the board/committee, their relevant work experience, and what they may bring on a personal level. Written reports of the interviews are provided to the Nominating Committee for further consideration in choosing the recommended nominee.
   
   In making the final choice, all aspects of the “best” person for the job are considered—relevant experience required by the board/committee, regional representation, gender representation, and English language skills.
   
   Sir David Tweedie: Once the CVs have been read by the individual members, we all vote electronically at the same time and then select for interview those nominees that receive the highest number of votes. We usually interview twice as many candidates as there are vacancies. The interviews are carried out by a Nominating Committee member and the chair of the committee [in question]. The notes on these interviews are then passed to the whole committee at the next meeting where the interview results are debated. If there are doubts about the caliber of those interviewed other candidates may be sought from member bodies.
    
4. How is your role as an ordinary (non-Board) member different from a Board member? How is your role as a Board member different from an ordinary (non-Board) member?
   
   Ana Maria Elorrieta: The difference between a Board member and non-Board member is that we have the input from the Board, including suggestions and concerns related to the other boards and committees. This includes discussions around strategy and risks. We can add this perspective to the Nominating Committee discussion.
   
   Japheth Katto: I think as a Board member, I bring the perspective of the Board as a whole. I will know the Board's thinking based on previous experience and on ongoing consultations between the Nominating Committee and the Board.
   
   Margaret Parker: I don’t believe my role as an ordinary member is different from a Board member. We all have a say in the decision making, all have a vote in choosing the candidates for interview, all have an opportunity to provide input after an interview. The Board members will have wider experience with IFAC, which occasionally will impact our decisions; however, generally, there is no difference.
   
   Sir David Tweedie: In most cases, there is no difference between the two roles. The Board members, however, are more experienced with the workings of IFAC—they can explain IFAC policies and answer questions about individuals who have served on IFAC boards/committees in the past or explain the history of certain applications.
    
5. What does serving the public interest, which is embedded in IFAC’s mission, mean to you as a member of the Nominating Committee?
   
   Ana Maria Elorrieta: To serve the public interest is to act with an objective and balanced view and avoid influence of any type. It means to think strategically and with a long-term view, looking to protect the society and not any individual part.
   
   Japheth Katto: Simply put, serving in the public interest means selecting those candidates that are going to work not in the interest of their nominating organization or their employers or regions, who are not going to allow [themselves] to be unduly influenced, and who are going to act with integrity in the interest of the global profession and the public that it serves.
   
   Margaret Parker: To me, serving the public interest means making decisions that are best for the whole rather than a part of the whole. This can be applied from a wide perspective, such as making decisions that are best for the world rather than a particular country or region, or doing what is best for a group rather than the individual. When applying this philosophy to the nominating [process], it means making decisions that are in the best interest of the public at large, rather than the accountancy profession in particular, or a particular region, country, or individual.
   
   Sir David Tweedie: The public interest should be in the DNA of every accountant. In looking at candidates, I look for those that have clearly been involved in public policy issues, have written articles advocating professionalism, or have given time to move the profession forward. Public interest to me is acting in a neutral, unbiased way to present transparent information to society at large and to act with integrity and objectivity without regard to particular interests. I look for this in those who are nominated for the [boards or] committees.
    
6. How does the committee ensure due process in its actions?
   
   Ana Maria Elorrieta: There is a clear and objective process that is carefully followed. There are discussions at each phase, to reaffirm the adequacy of the decisions taken at each stage of the process. Every member is free to contribute and discuss.
   
   Japheth Katto: The committee has procedures and processes that are agreed [to], including Terms of Reference [which are approved by the IFAC Council and the PIOB]. It makes consensus decisions and documents its processes. In addition, its work is observed by the PIOB.
   
   Judy Tsui: Due process is ensured through:
   • Open, detailed, and rigorous discussions;
   • Adhering to anonymous electronic voting [to derive a shortlist of candidates];
   • Adhering to the principle of candidate selection based on the “best person for the job” and meeting geographical and gender diversity when possible once the candidates meet performance criteria; and
   • Maintaining the practice of having the board/committee chair and Nominating Committee members conduct telephone interviews for selecting board/committee members, and conducting in-person interviews for selecting IFAC Board and Nominating Committee members, and board/committee chairs.
   Margaret Parker: The committee members are very conscious of working in the public interest and according to the Terms of Reference of the committee. Members of the staff of IFAC who are familiar with the Constitution and regulations surrounding the work of the committee are also in attendance at the meetings to provide input where necessary. However, the meetings of the Nominating Committee are overseen by a member of the PIOB who ensures due process is followed and that the public interest is protected.
   
   Sir David Tweedie: See the answer to question three. Sometimes, however, excellent candidates simply are unable to obtain a place on a committee by virtue of the fact that their country or region is over represented and views from other parts of the world are necessary to give balance to that committee. In such cases, the unsuccessful candidates are frequently advised to reapply for a position. Due process isn’t simply looking for the best candidates but seeking to achieve a balanced composition on any board or IFAC committee.

Thank you for signing up to receive eNews from the International Ethics Standards Board for Accountants (IESBA, the Ethics Board). This edition of IESBA eNews provides a summary of decisions made at the board’s meeting held June 10-12, 2013, in New York, USA. See the Meeting Page for the meeting highlights podcast, meeting summary, and agenda papers.

IN THIS ISSUE:

1. Responding to a Suspected Illegal Act
2. Definition of Those Charged with Governance
3. Structure of the Code
4. Future Strategy and Work Plan
5. Review of Part C of the Code
6. Provision of Non-Assurance Services to an Audit Client
7. Long Association of Senior Personnel (Including Partner Rotation) with an Audit Client
8. Emerging Issues and Outreach
9. Next Meetings
10. Ethics Board is Hiring
11. 2013 IESBA Handbook
12. Registration Now Open for World Congress of Accountants 2014; Sponsorship Opportunities Available

1. Responding to a Suspected Illegal Act

The Ethics Board considered a proposed alternative to the approach set out in the Exposure Draft, Responding to a Suspected Illegal Act, regarding a professional accountant’s responsibilities when encountering a suspected illegal act. Among other matters, the Ethics Board discussed the concept of a permission in the Code of Ethics for Professional Accountants (the Code) for both professional accountants in public practice and professional accountants in business to override confidentiality in specific circumstances when responding to a suspected illegal act. In addition to considering the various elements of the proposed alternative approach, the Ethics Board discussed the thresholds for actions, the types of suspected illegal acts to disclose, and documentation. The Ethics Board will continue its deliberation of the proposed alternative approach at its September 2013 meeting.

2. Definition of Those Charged with Governance

The Ethics Board approved for issuance, subject to confirmation by the Public Interest Oversight Board (PIOB) in September 2013 that due process has been followed, a revised definition of “those charged with governance” and related changes to the Code. The changes will be effective on July 1, 2014.

3. Structure of the Code

The Ethics Board approved the terms of reference for the working group formed to advise the board on ways to improve the usability of the Code. The board also supported the working group’s research plan and proposed timeline for the initiative, and provided suggestions for the working group to consider as it begins research. The Ethics Board will receive an update on the research at its September 2013 meeting.

4. Future Strategy and Work Plan

The Ethics Board considered the responses to its survey on the 2014-2016 IESBA Strategy and Work Plan. It also considered the Planning Committee’s preliminary analysis of the survey results and recommendations for the way forward. Among other matters, the Ethics Board agreed to extend its 2011-2012 Strategy and Work Plan through the end of 2014. The Ethics Board also identified a short list of topics for possible inclusion in its next Strategy and Work Plan (2015-2017) for further consideration. The board will continue its deliberation on these topics at its September 2013 meeting.

5. Review of Part C of the Code
Discussion around the project to review Part C of the Code, which addresses professional accountants in business (PAIBs), included the application of Part C to all professional accountants and pressure by superiors and others to engage in unethical or illegal acts. Consideration of matters relevant to professional accountants in public practice has been deferred until after PAIB-specific issues have been addressed. The Ethics Board will continue its consideration of pressure issues at its September 2013 meeting.

6. Provision of Non-Assurance Services to an Audit Client

The Ethics Board considered the findings from a survey of a number of jurisdictions, conducted by the project Task Force, to narrow the scope of the project on non-assurance services. The Ethics Board also considered the Task Force’s recommendations and agreed that the project proposal should be refined to focus on the following:

• Clarification of the provisions in Section 290, Independence—Audit and Review Engagements, addressing management responsibilities;
• Clarification of the concept of “routine and mechanical” services relating to the preparation of accounting records and financial statements; and
• A review of the emergency exception provisions in the Code pertaining to both accounting and bookkeeping services, and taxation services.

The Ethics Board also supported the development of a paper with the aim of, among other matters: raising awareness of the Code’s approach to non-assurance services and of the robustness of the related provisions in the Code; highlighting supplementary ways by which the threats and safeguards approach to independence in the Code may be enhanced; and generally increasing the visibility and transparency of the relevant provisions in the Code. The Ethics Board will receive an update on the project at its September 2013 meeting.

7. Long Association of Senior Personnel (Including Partner Rotation) with an Audit Client

The Ethics Board received an update on the project to review the long association provisions in Section 290 of the Code to ensure that they continue to provide robust and appropriate safeguards against the familiarity and self-interest threats arising from long association with an audit client. The Ethics Board will consider the findings from the survey and other research being undertaken for this project at its September 2013 meeting.

8. Emerging Issues and Outreach

The Ethics Board approved the terms of reference for the working group formed to advise the board in relation to emerging issues and international developments of relevance to the board’s work and outreach to stakeholders. The Ethics Board will consider at its September 2013 meeting preliminary recommendations from the working group with respect to processes by which the board may consider emerging issues and its strategy for outreach.

9. Next Meetings

Meetings of the IESBA and the IESBA Consultative Advisory Group (CAG) are open to the public. The IESBA CAG will next meet in New York, USA, on September 11, 2013. The next meeting of the IESBA will be in Sydney, Australia, September 16–18, 2013.

For more information and to register to attend an IESBA or IESBA CAG meeting as an observer, visit IESBA Meetings  and IESBA CAG Meetings respectively.

10. Ethics Board is Hiring

The Ethics Board is seeking a technical manager to join its staff team based in New York. Qualified candidates will currently be, or have had experience, at the manager or senior manager level in professional practice, a professional accounting body, the office of a public sector auditor, or similar. For a complete job description and required skills and experience, see Working at IFAC. Qualified candidates should send a resume to jobs@ifac.org. 

11. 2013 IESBA Handbook

The 2013 Handbook of the Code of Ethics for Professional Accountants is now available to download or purchase. The 2013 edition contains the final revised pronouncements addressing breaches of provisions in the Code and conflicts of interest, and the revised definition of “engagement team.” These changes will be effective in 2014; see the individual pronouncements for details. To place an order for this, in addition to the 2013 handbooks for public sector accounting and auditing and assurance standards, visit Handbook of the Code of Ethics for Professional Accountants.   

12. Registration Now Open for World Congress of Accountants 2014; Sponsorship Opportunities Available

The next World Congress of Accountants (WCOA) will be hosted by the Consiglio Nazionale dei Dottori Commercialisti e degli Esperti Contabili (CNDCEC) in Rome, Italy in 2014. Themed 2020 Vision: Learning from the Past, Building the Future, the 2014 WCOA will be held November 10-13 at the Auditorium Parco della Musica. More than 4,000 professionals from around the world will convene at this quadrennial IFAC event. WCOA 2014 will look back to explore the evolution of the accountancy profession and forward to showcase the innovations that will shape the future of the profession. Register Now.

The WCOA also provides a global platform for organizations and firms to share their projects and visions via various sponsorship opportunities.

Welcome to a Special Edition of the Professional Accountants in Business Committee eNews—Accounting for Natural Capital.

1. Overview
2. Where Does the Accountancy Profession Fit it In?
3. A Macro View of Natural Capital Risk
4. Business Case for Natural Capital Management
5. The TEEB for Business Coalition
6. Tracking a Carbon Bubble
7. Innovative Organizations

8. Other Activities and Resources

1. Overview

Attention from the accountancy profession on natural capital accounting is rapidly increasing in response to concern about the potential for systemic risk of climate change and environmental externalities that affect organizational, market, and societal sustainability.

Sustainable economies depend on sustainable organizations. To be viable over time, the ecosystems and resources organizations depend on need to be maintained and enhanced. Yet when it comes to the natural environment, we are seeing a rapid depletion of capital and resources, as well as the risk of a financial “carbon bubble” due to the potential limitations on what percentage of global fossil fuel reserves can be burned (see Tracking a Carbon Bubble for additional information).

This loss of natural capital is posing a new array of threats and opportunities to business ranging from competition for access to resources, and tightening regulation. Therefore, the time has come for organizations in the public and private sectors to adapt to a world of increasingly scarce natural resources.

2. Where Does the Accountancy Profession Fit it In?

Factors that are economically invisible contribute to natural capital depletion. Many environmental impacts are externalities because they are not accounted for in market economics. Government and business alike are starting to recognize the importance of measuring and valuing natural capital. Widely accepted standards for measurement and valuation would help organizations implement natural capital management and facilitate consistency and comparability across organizations.

Natural capital assets broadly fall into two categories: those that are non-renewable and traded, such as fossil fuel and mineral commodities, and those that provide finite renewable goods and services for which no price typically exists, such as clean air, groundwater, and biodiversity. Natural capital is the stock of capital derived from biological diversity and ecosystems as well as natural resources such as fossil fuels.

Is Natural Capital a Material Issue? by the Association of Chartered Certified Accountants, KPMG, and Fauna and Flora International demonstrates the lack of a standardized business case for considering biodiversity and ecosystem issues as a barrier impeding companies from effectively determining risk and opportunity exposures. So too is a lack of awareness among accounting and business communities of natural capital issues.

Given the importance of biodiversity and ecosystems to business and society, the accountancy profession has an important role to play in raising awareness of the business case, and developing new valuation, accounting, and reporting approaches.

Organizations can position themselves for sustainable success by ensuring that risk and materiality assessments consider natural capital, and by going through a process of placing monetary values or measurements on what nature does for their business models. This leads to better business decision making by exposing significant costs and benefits that could materially impact the bottom line but that traditional financial analyses usually miss.

This eNews highlights what is being done and by whom to develop natural capital accounting as an integrated part of business decision making and reporting.

3. A Macro View of Natural Capital Risk

Trucost’s study, Natural Capital at Risk: The Top 100 Externalities of Business, provides a high-level indication of the priority sectors and regions where natural capital risk lies and, therefore, the largest natural capital risks and opportunities for business and investors. Highest impact externalities are the primary production (agriculture, forestry, fisheries, mining, oil and gas exploration, utilities) and primary processing (cement, steel, pulp and paper, petrochemicals) sectors analyzed and are estimated to have externality costs totaling US$7.3 trillion, which equates to 13% of global economic output in 2009. The value of the Top 100 externalities is estimated at US$4.7 trillion or 65% of the total primary sector impacts identified.

The majority of environmental externality costs are from greenhouse gas emissions (38%) followed by water use (25%), land use (24%), air pollution (7%), land and water pollution (5%), and waste (1%). The report assessed more than 100 environmental impacts using the Trucost environmental model, which condenses them into six Environmental Key Performance Indicators (eKPIs) to cover water use, greenhouse gas (GHG) emissions, waste, air pollution, water and land pollution, and land use.

4. Business Case for Natural Capital Management

Organisational Change for Natural Capital Management, released by The Economics of Ecosystems and Biodiversity (TEEB) for Business Coalition, describes how business leaders can strategize and implement changes in organizational behavior related to valuing natural capital in their companies. The findings are threefold.

• A small group of pioneering companies who recognize the growing business case are moving natural capital management forward and expect to embed it into their business within the next three years. The rationale is they will be much better positioned than other companies to manage and thrive in the resource-constrained world. In particular, availability of freshwater, renewable energy, climate regulation, fiber, and food were identified as the most important natural capital risks over the next 3-5 years.
• Delaying the measurement and management of natural capital carries a significant business risk for companies in terms of the availability of key raw materials and maintaining sustainable competitive advantage.
• Current barriers to change at the organizational level include a lack of harmonized methods to measure, prioritize, and integrate natural capital into the business and organizations analyzing their impacts beyond their organizational boundary into their supply chains.

The 24 companies featured in the Corporate EcoForum report, The New Business Imperative: Valuing Natural Capital, are taking a lead by uniting in the view that immediate leadership to safeguard well-functioning ecosystems is a business imperative, not a matter of philanthropy. Companies cited in the report include Puma, Nike, Lockheed Martin, GM, Disney, Enterprise, TD, Coca Cola, Patagonia, Xerox, Unilever, Kimberly-Clark, and Marriott.

5. The TEEB for Business Coalition

The TEEB for Business Coalition is developing tools and guidance to successfully incorporate natural capital into strategy and decision-making processes. This involves companies reflecting the true social and environmental costs of depleting natural capital and creating benefits, such as restoring natural environments and developing social and human capital. The coalition is a global platform for supporting the development of widely agreed-on methods for natural and social capital valuation in business. This work involves considering a valuation framework that can define what to measure and why.

A number of organizations are supporting the coalition, including the Institute of Chartered Accountants in England and Wales (a founding member), IFAC, the Chartered Institute of Management Accountants, the World Business Council for Sustainable Development, the International Union for Conservation of Nature, the World Wildlife Fund UK, and the Global Reporting Initiative, all of which are engaged in developing and furthering the coalition. IFAC is represented by PAIB Committee member Ian Rushby, who is also a trustee of the International Institute for Environment and Development.

TEEB for Business Coalition is holding its annual conference in Singapore November 18-19, 2013, in conjunction with the Responsible Business Forum. Additional details will be shared in later issues of the PAIB Committee’s eNews and on the TEEB for Business Coalition website.

6. Tracking a Carbon Bubble

The Carbon Tracker Initiative report, Unburnable Carbon, calculates that only 31% of the world's currently indicated fossil fuel reserves, which equate to 2,860bn tonnes of carbon dioxide, could be burned for an 80% chance of keeping below a 2°C global temperature rise, which is commonly regarded as the threshold within which to avoid dangerous climate change. For a 50% chance of 2°C or less, only 38% could be burned.

This information has potentially significant implication for loss of value to investors given how far reaching carbon is for financial markets—the top 100 coal and top 100 oil and gas companies have a combined value of US$7.42 trillion as of February 2011. Additionally, the countries with the largest greenhouse gas potential in reserves on their stock exchanges are Russia, the United States, and the United Kingdom and the stock exchanges of London, Sao Paulo, Moscow, Australia, and Toronto all have an estimated 20-30% of their market capitalization connected to fossil fuels. Carbon and fossil fuels, and decisions regarding their use and value, can have significant impacts on financial markets and futures around the world.

This carbon bubble leads to a reporting challenge, particularly for fossil fuel companies. For these companies, it is not necessarily the scale of operational emissions that is the strategic challenge but the emissions associated with their products, which are currently locked into their reserves. The potential carbon footprints of reserves may not be adequately transparent with obsolete data masking the full risks facing fossil fuel reserves. Consequently, companies need to consider moving beyond simply annually reporting last year’s emissions flows to a more forward-looking analysis of carbon stocks.

7. Innovative Organizations

Becoming Net Positive

An increasing number of companies, including Coca Cola and retail organizations Kingfisher and Ikea, are striving to become net positive, which means that they will give back more than they take in relation to critical environmental and social factors upon which their business models depend.

For example, for a do-it-yourself (DIY) business such as Kingfisher, timber is an essential raw material. It depends on a forest area approximately the size of Switzerland. It aspires to create more forest than it needs to develop products. Beyond timber, Ikea strives for resource independence, by encouraging all waste be turned into resources; energy independence, by being a leader in renewable energy, and becoming more energy efficient throughout its operations and supply chain. Coca Cola aims to return as much water to nature as it uses in its products and their production.

Indian conglomerate ITC reports that it is carbon positive (by sequestering or storing twice the amount of carbon dioxide emissions that it emits through, for example, farm forestry initiatives, which add to plantation sizes); water positive (by creating three times more rainwater harvesting potential than the net water consumed by its operations); and waste positive (by recycling its own paper and fly ash, a byproduct of coal combustion, as well as buying other company’s waste paper to use in its paperboard operations).

The key success factors behind such initiatives include:

• providing vision, leadership, and commitment from the top of the organization to be sustainably successful;
• applying a financial mindset by establishing a business case and understanding how sustainability actions contribute directly to business value, either through revenue generation, cost control, risk management, or innovation;
• setting aspirational and challenging goals and targets;
• connecting sustainability goals to strategy by identifying significant drivers and subjecting these aspects to a systematic management process that involves setting and cascading targets and performance measures to facilitate the delivery of vision and strategy;
• collaborating closely with customers and suppliers;
• measuring the drivers of business externalities, such as greenhouse gas emissions and resulting impacts, such as climate change (this involves data collection, analysis, and interpretation, and integrating data requirements into management and/or accounting systems); and
• communicating with stakeholders through high-quality reports and disclosures.

An Innovative Approach to Disclosure: PUMA Environmental P&L Methodology

In 2011, PUMA became the first major company to release an environmental profit and loss (P&L) statement and put an economic value on greenhouse gas emissions and water consumption (see PAIB Committee eNews July 2011 for more information). PUMA started on its journey to establish how much it would need to pay for the services nature provides so that PUMA can produce, market, and distribute footwear, apparel, and accessories made of leather, cotton, rubber, or plastic for the long term. A P&L methodology utilizes the essence of an accounting framework when monetizing environmental impacts. The economic valuation of PUMA’s environmental impact provides a wake-up call and reveals where it has to direct its sustainability initiatives to make real improvements in reducing its footprint. These include identifying more sustainable materials, investigating the development of broadly-accepted definitions of sustainable cotton and rubber, and looking for additional opportunities to reduce greenhouse gas emissions and other environmental impacts.

8. Other Activities and Resources

• Corporation 2020 is a movement that calls for new ways for corporations to operate given that the legal status and business persona of today’s corporation are almost a hundred years old.
• Forum for the Future is an independent non-profit that works globally with business and government to inspire new thinking, build creative partnerships, and develop practical solutions.
• Global Reporting Initiative (GRI)’s Approach for Reporting on Ecosystem Services: Incorporating Ecosystem Services into an Organization’s Performance Disclosure suggests indicators organizations could use to assess and report their impacts on ecosystem services. In cooperation with the United Nations Environment Programme’s World Conservation Monitoring Centre and the Dutch consultancy firm CREM, GRI highlights approaches for developing sustainability reporting indicators to help companies report their impacts and reliance on ecosystem services. Additionally, the fourth generation of the GRI’s Sustainability Reporting Guidelines (G4) is available on the GRI website.
• Natural Capital Declaration is a declaration by finance-sector CEOs representing commitments made at the Rio+20 Earth Summit to work toward integrating natural capital considerations into financial products and services. The Declaration is convened and facilitated by the United Nations Environment Programme Finance Initiative, the Global Canopy Programme, and the Center for Sustainability Studies of the Business Administration School of the Getulio Vargas Foundation.
• The Prince of Wales’ Accounting for Sustainability Project includes an initiative on valuing natural capital and is a co-founding member of the TEEB Business Coalition.
• The B Team is a not-for-profit initiative that has been formed by a group of global business leaders to create a future where the purpose of business is to be a driving force for social, environmental, and economic benefit.
  • UK Department for Environment, Food, and Rural Assets (DEFRA)’s Ecosystem Markets Task Force was established to respond to the continuing degradation of ecosystems and loss of biodiversity and highlights efforts by the UK government to become a global leader in measuring natural capital.
  • World Bank Wealth Accounting and the Valuation of Ecosystem Services (WAVES) is a global partnership to promote sustainable development by ensuring that the national accounts used to measure and plan for economic growth include the value of natural resources.
  • The World Business Council for Sustainable Development (WBCSD)’s Framework for Corporate Ecosystem Evaluation provides a framework for improving corporate decision making through valuing ecosystem services. The guide puts into operation TEEB’s Mainstreaming the Economic of Nature, released in October 2010, which also includes reference to the international mining company Rio Tinto, which adopted a net positive impact on biodiversity as a long-term goal.
  • WBCSD also recently published Eco4Biz: Ecosystem Services and Biodiversity Tools to Support Business Decision Making. The report provides a guide to help companies sift through an emerging family of tools to help them assess and manage their impacts and dependencies on natural capital. Eco4Biz also features a decision tree with two questions corporate managers might ask: a) At what scale would you like to carry out an assessment—global, landscape (including individual site and portfolio of sites), or product level? and b) What outputs would best support your decision-making—a map (including supporting reports), a quantitative value, or a score showing priority areas?