From Sustainability Reporting to Natural Capital Valuation: Aligning ESG with Green Accounting

Abstract

This study examines how environmental, social, and governance (ESG) frameworks can be aligned with green accounting principles in order to incorporate natural capital valuation into sustainability reporting. Although ESG has become a dominant mechanism for non-financial disclosure, its environmental dimension remains largely centered on standardized indicators, risk exposure, and firm-level performance. This limits its ability to capture the broader value, depletion, and long-term dynamics of natural capital. In contrast, green accounting provides a stronger basis for recognizing environmental stocks, ecosystem services, and ecological degradation, yet it remains insufficiently integrated into mainstream reporting systems. Using a qualitative and conceptual research approach based on structured literature analysis, this study identifies the main points of disconnect between the two approaches and explores their potential convergence. The findings suggest that a more coherent integration of ESG and green accounting is necessary to strengthen the analytical depth, ecological relevance, and strategic value of sustainability reporting.