Five years ago, many investors and executives would have politely told Jill Atkins to buzz off. Now they listen keenly when the British academic presents her work, known as “extinction accounting”, which shows how companies are contributing to the demise of honeybees, as well as other species – and how that could come back to sting them. “I think people are beginning to get it now,” Atkins, chair in financial management at the University of Sheffield, told Reuters. “The capital markets have contributed to this mess, and they have a responsibility for sorting it out.” But Atkins is appealing to wallets, not consciences. Her method is one of a series of projects seeking ways to assess a company’s impact on climate change and the natural world in financial and accounting terms, and thus better price risk for the likes of pension funds, banks and insurers. These initiatives differ widely in methods and scope. But they share a common goal: giving the growing numbers of investors pledging to rebalance their portfolios the insight they need to sort the most sustainable companies from the most destructive. While groups such as MSCI or Sustainalytics already offer to guide investors by creating ratings systems to rank companies’ environmental, social and governance (ESG) credentials, these approaches take a different tack: aiming to change the way companies report to their shareholders. Options range from Atkins’ research to encourage companies to provide scientific assessments of their impact on plants and animals, to publishing a “carbon-adjusted earnings per share” figure or putting a monetary value on impacts so misdeeds like plastic pollution can directly affect a company’s valuation. Given the scale of today’s environmental crisis, some investors and campaigners compare the depth of change needed in corporate reporting with the kind of fundamental reform of accounting seen in the aftermath of the Wall Street Crash. “In 1929 there was no transparency on profit; companies could pick their own accounting principles and there were no auditors to verify the numbers,” said Ronald Cohen, co-founder of London-based Bridges Fund Management and chairman of the Global Steering Group for Impact Investment advocacy group. “Today, you could argue we’re at a similar crossroads.” Change won’t be easy. With so many ideas and tools in play, it will take time for investors, companies and the bodies that set accounting standards to settle on consistent global rules. And if companies do begin to introduce more sophisticated metrics to assess their impact on nature and society, some investors fear these new numbers will simply present opportunities to game the system in whole new ways. ‘CHANGE THE PLUMBING’ Atkins, who is collaborating with academics at the University of the Witwatersrand in Johannesburg, believes that requiring companies to introduce “extinction accounting” into annual reports could trigger rapid change. Companies would have to assess the populations of threatened species living near their operations; work out whether their business puts them at risk; come up with plans to protect them; and explain them to investors. “This would give investors an entirely new level of insight into the connections between corporate profitability and risks to the natural world,” said Martina Macpherson, president of the Network for Sustainable Financial Markets. Other projects take a different approach, helping investors build new models to assess companies’ environmental and social footprints. A team at Harvard Business School, for example, aims to generate a dollar value for companies’ positive and negative impacts across a range of domains to enable easy comparison. “We have to change the plumbing of the system,” said George Serafeim, a lead researcher. “It’s not a sufficient condition to change corporate behaviour and resource allocation, but it’s a necessary condition.” This year, for example, the team published an analysis of two companies selling consumer packaged goods, aiming to calculate the value or cost of their impacts in areas from nutrition to greenhouse gas emissions and plastic waste.