Natural Capital: Essence, Types and Evaluation Procedure

H.O. Partyn, A.H. Zahorodniy, L.M. Pylypenko, O.V. Didukh
International Journal of Economics and Business Administration, Volume VIII, Issue 3, 202-214, 2020
DOI: 10.35808/ijeba/496

Abstract:

Purpose: The article investigates the nature of the enterprise's natural capital and its classification. Design/Methodology/Approach: The study is based on the hypothesis that the natural capital used in the economic activity of an enterprise influences the value of the enterprise, and therefore such capital should be reflected in public reporting to inform the stakeholders. The article has used the dialectical method of cognition to establish the essence of the concept of the natural capital of the enterprise and its relationship with other similar categories, classification of natural capital of the enterprise, determination of the main stages of formation of information necessary for the assessment of the natural capital, and analysis and synthesis to highlight the key elements of natural capital information that well-known companies display in their integrated reporting. The subject of the study was the integrated reporting of four big companies operating in Ukraine (three multinational and one national). Findings: Approaches to the information and analytical support of the estimation of the natural capital of the enterprise with consideration to costs and benefits from its use are analyzed, the main stages of formation of the information necessary for its evaluation are determined. Practical Implications: The results are interesting from the theoretical and practical aspects to be applied for the improvement of the enterprise natural capital management and reporting. Originality/Value: The paper contains a formalized approach to the estimation of the natural capital of the enterprise, based on the method of cash flow discounting.


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