CAIR Director Paolo Quattrone, Professor of Accounting, Governance and Society at Alliance MBS, has been interviewed by the Institute of Chartered Accountants in England and Wales (ICAEW) in response to a major report on biodiversity and economics.

Earlier this year a government commissioned review by Professor Sir Partha Dasgupta into the economics of declining biodiversity was published, which argued that if we are going to account for biodiversity loss then we need to evolve a new language to accommodate it. 

In the report Dasgupta says his “overarching aim is the reconstruction of economics to include nature as an ingredient”, and that “truly sustainable economic growth and development means recognising that our long-term prosperity relies on rebalancing our demand of nature’s goods and services with its capacity to supply them.”

Rethinking the income statement

In the interview Professor Quattrone, who has been engaged in rethinking the format and structure of the income statement in a way that speaks to nature in collaboration with ICAEW and the Capitals Coalition, argues that a modified version of the value-added income statement that includes a provision for nature would play a key role in protecting biodiversity. “We are rethinking the income statement, not in terms of profit, but in terms of value-added, which is something we did in the past,” he says.

He adds that it is also time to bring together metrics associated with the UN’s Sustainable Development Goals and ESG reporting with financial reporting. This is work he is currently doing with the Chartered Institute of Management Accountants (CIMA) and Professor Ariela Caglio at Bocconi University in Milan.