USA - White House Announces Strategy On Incorporating Nature-Based Accounting In Benefit-Cost Analyses - Climate Change - United States Mondaq
Washington D.C. (September 6, 2022) - The White House Office of Management and Budget (OMB) is seeking input on the development of government-wide natural capital accounts and standardized environmental-economic statistics.
The Administration intends for these new metrics to be used in benefit-cost analyses associated with agency actions and to measure risks in the environmental, social, and governance (ESG), and lending contexts. Comments are due by October 21, 2022.
This proposed strategy implements President Biden's 2022 Earth Day Executive Order 14072, Strengthening the Nation's Forests, Communities and Local Economics. Section 4, Deploying Nature-Based Solutions to Tackle Climate Change and Enhance Resilience, directs the OMB to issue guidance on the valuation of ecosystem and environmental services and natural assets in federal regulatory decision-making and directs the regulatory agencies to identify opportunities for greater deployment of nature-based solutions through policy, guidance, and regulatory program changes.
The strategy explains, "the challenges of climate change, biodiversity loss, air and water pollution, and environmental injustice carry implications for both the economy and the environment, and society cannot effectively or efficiently confront those challenges if economic and environmental accounting and policy proceed on two separate tracks." Further, the Administration suggests that banks and financial regulators understand that biodiversity loss could pose risks relevant for financial stability. The Administration concludes that a system of nature-based accounting will help investors and banks understand the risks, leading to shifts in lending practices.
Regarding ESG reporting, the Administration sees the need for a federal accounting system of environmental-economic statistics for providing an official data source that firms can use to verify claims about their relationship to nature. In addition to impacts, there may be opportunities for conservation activities and stewardship of natural capital to become a credit-enhancing activity for landowners. The Administration encourages federal agencies to incorporate into their benefit-cost analyses how their actions change the value of services provided by natural assets and anticipates incorporation into OMB circulars on federal benefit-cost analyses by 2026.
It appears that this effort is already well underway, including potentially adopting approaches developed by the United Nations and being implemented by over 90 countries. As such, stakeholders are encouraged to engage with this OMB request for information, as much is at stake for U.S. businesses.
Request for Information To Support the Development of a Strategic Plan on Statistics for Environmental-Economic Decisions
Office of Management and Budget.
Request for Information (RFI).
The White House Office of Management and Budget (OMB)—on behalf of the co-chairs of the Interagency Policy Working Group on Statistics for Environmental-Economic Decisions (Working Group), the Office of Science and Technology Policy (OSTP), and Department of Commerce (DOC)—requests information and comments on questions posed by the Working Group to help inform the development of Government-wide natural capital accounts and standardized environmental-economic statistics. The Working Group has developed a draft Strategic Plan that recommends short- and long-term strategic goals, as well as objectives and proposed strategies to achieve a routinely produced set of Government-wide natural capital accounts and standardized environmental-economic statistics that complement and operate in alignment with core national economic accounts and statistics. To support the Strategic Plan, OMB seeks information on likely and potential applications for U.S. natural capital accounts, established statistics and accounts that would strengthen the U.S. system, relevant external factors that may affect implementation of the Strategic Plan, and relevant ancillary or indirect consequences of developing natural capital accounts or associated statistics.
Interested persons and organizations are invited to submit comments by October 21, 2022.
Submit comments through www.regulations.gov —a Federal E-Government website that allows the public to find, review, and submit comments on documents that agencies have published in the Federal Register and that are open for comment. Enter “OMB-2022-0009” (in quotes) in the search box and follow the instructions for submitting comments. Please include the Docket ID (OMB-2022-0009) and the phrase “RFI-Natural Capital” at the beginning of your comments. Please also indicate which questions from the INFORMATION REQUESTED section of this notice is addressed in your comments.
Comments submitted in response to this notice may be made available to the public and subject to disclosure under the Freedom of Information Act. For this reason, please do not include in your comments information of a confidential nature, such as sensitive personal information or proprietary information. If you send an email comment, your email address will be automatically captured and included as part of the comment that is placed in the public docket; however, www.regulations.gov does include the option of commenting anonymously. Please note that responses to this public comment request containing any routine notice about the confidentiality of the communication will be treated as public comments that may be made available to the public notwithstanding the inclusion of the routine notice.
Electronic Availability:Federal Register notices are available electronically at www.federalregister.gov/. The draft Strategic Plan is available at https://www.whitehouse.gov/wp-content/uploads/2022/08/Natural-Capital-Accounting-Strategy.pdf.
Public Review Procedure: All comments and proposals received in response to this notice will be available for public inspection.