#35 - Accounting for biodiversity: stocks, variations of stocks and supply chain accounting

Joshua Berger

CEO at BioInt | Transforming biodiversity impact & dependency measurement | Driving pragmatic & science-based actions for nature | The Biodiversity Footprint Intelligence Company | Views are my own

Published May 20, 2025

This thirty fifth issue of The Nature Intelligence Newsletter delves into ecosystem accounts for corporates. It covers:

Distinction between accounting frameworks focused on stocks (accumulated negative impacts, remaining biodiversity) and variations of stocks (periodic gains/losses) vs frameworks focused on time-integrated impacts
Illustration with an example of water withdrawals and discharges in a river
Accounting for supply chain impacts: mirror (attributional) vs cumulative (consequential) accounting

Without a clear understanding of biodiversity accounting, building corporate biodiversity trajectories is like running with your eyes closed

Am I exaggerating? In truth, I think this is a fair assessment because if you try to build trajectories without a robust accounting frameworks, you really just do not know what you are doing.

In a previous Nature Intelligence Newsletter issue also dedicated to accounting, I talked about the definitions of negative, positive, reduced and avoided impacts and Scopes (value chain boundaries). Now it is time to talk about the core of ecosystem accounting!

Stocks, variations of stocks and time integration

The post that follows is very dense. "As usual" some may grumble 😜 - well that's also why I do these Newsletter to link concepts together and further explain difficult concepts. It actually contains two key stories and I'll probably retell them in separate posts in the future. Take your time to digest the post.

The first story (a camera and a glass) is about stocks and variations of stocks, an accounting approach aligned with the Biological Diversity Protocol. It is also compatible with Corporate Natural Capital Accounting approaches or the UN System of Environmental-Economic Accounts—Ecosystem Accounting (UN SEEA EA). The two slides are all about this first story.

Quick clarification: dynamic impacts (on slide 2) = periodic losses/gains . And static impacts (on slide 2) = accumulated negative impacts. I tend to avoid the use of "dynamic" and "static" as they can be confusing nowadays but the terms were used by CDC Biodiversité in the past (and slide 2 is an extract from their report).

The key lesson you should remember from that story is that we should account not only for accumulated negative impacts (the empty volume above the liquid), but also for periodic losses/gains (the volume of liquid lost/gained) and for remaining biodiversity (the volume of liquid).

The second story (a calculating video camera and many glasses) is about time integration, an accounting approach used in Life Cycle Assessments. And how it compares to stock/variation of stocks.

The key lesson is that both accounting frameworks answer different questions and stock/variation of stock is more appropriate for trajectory building.

Illustration for a freshwater ecosystem

This post should really be read by looking:

first at the two charts in the document attached
then using the text from the post as a helper

In short, it illustrates how an increase in discharge to a river (from situation (ii) to (iii)) increases water flow and thus reduces pressures compared to an undisturbed situation (i) and therefore leads to a periodic gain of biodiversity over a period of time. And then how the higher remaining biodiversity is maintained.

For more details, I strongly recommend reading section “1.4.2 Example of hydrological disturbance” of the full report from which this is extracted. The explanations are more comprehensive than what I could do in a LinkedIn post limited in length.

Technical notes:

Definition of AAPFD: the AAPFD measures the deviation between an undisturbed and a disturbed river flow pattern, or in other words with or without anthropic use of the river’s water. It is not practical to represent its equation here but it involves Qi the runoff in the ith month, Qi0 the natural runoff in the ith month and Qi0 the year-averaged natural runoff.
Pressures other than Hydrological disturbance are ignored to simplify.
(B): periodic gain occurs possibly over a period longer than a year because ecosystems do not regenerate instantly, but in order to simplify the situation, it is assumed in the charts that ecosystems regenerate very rapidly and periodic gains occur within one year.

Accounting for supply chain impacts: share of current impacts vs impacts of a decision/change

The last key topic which can totally change the figures accounted for (and reported) is the type of accounting framework for supply chain impacts. Two main competing frameworks exist. I've been calling them "mirror" and "cumulative" for a few years, but they are really close to what Life Cycle Assessment (LCA) communities call respectively "attributional" and "consequential".

Until recently, the climate world has been using mostly mirror (attributional) accounting. This is because climate policies focus mostly on halting variation of stock of GHG emissions in the atmosphere: the yearly GHG emissions (= the periodic loss of biodiversity). It does not focus much on the stock of past emissions already in the atmosphere (= the accumulated negative impacts of biodiversity).

But recent focus on Forest, Land and Agriculture (e.g. SBTi FLAG) has included cumulative (consequential) thinking. In particular, it focuses not just on how much forest loss is attributed to the company via commodity footprints (mirror accounting), but also requires companies to ensure that no deforestation occurs in their supply chain after 2025 (cumulative accounting), regardless of annual land use attribution rules.

For biodiversity, the stock of remaining biodiversity matters a lot. It is not just about how much we are losing each year (or "footprints" disconnected from actual, located, ecosystems). So cumulative (consequential) accounting matters a lot more.

Disclaimer: all views are mine and do not represent any institution or initiative's.

Access previous issues of the Nature Intelligence Newsletter:

Case studies and examples

#01 - Impacts on ecosystem integrity of a listed equity index assessed for the first time - STOXX600

#08 - Getting inspired: 3 front-runners who assessed their biodiversity impacts at the corporate level

#09 - Ecosystem condition: direct measurement and assessment of regulatory offsets

Ecosystem condition definition and metrics

#02 - All you ever wanted to know about the MSA

#03 - Ecosystem condition: the indicator to watch for corporate biodiversity performance

Biodiversity measurement tools

#04 – Differences between the corporate biodiversity metrics

#05 - Charting path: navigating the biodiversity tool wilderness - part 1 - The compasses