Natural capital refers to the natural environment and its ecosystems from which we extract ecosystem goods (such as wood, minerals, water) and ecosystem services (such as pollination, flood control, air purification, climate moderation) for our use. Natural capital underpins our economy and yet its use is often underpriced or free, and when we degrade or destroy it we are not often held responsible.

Key Messages

• A growing number of corporations are seeking to understand how resource constraints and natural capital depletion will impact their business. Companies at the cutting-edge are implementing methods of measuring and valuing their impacts on natural capital and are integrating these impacts into their decision-making. This practice is known as natural capital accounting.
• Over 200 companies from different business sectors have adopted natural capital accounting, in a diversity of ways tailored to their individual circumstances. Some companies are implementing valuation of the important unpriced natural resources they use (such as water) while others are valuing the full environmental impact of the production, use and disposal of their products. The companies adopting natural capital accounting are not just natural resource intensive operations. In fact, many companies in other sectors of the economy are also adopting the practice in order to better understand their dependency on natural capital, which may not otherwise be obvious.
• Natural capital accounting can be of high value to organizations; it can result in innovation, help identify opportunities for new collaborations, and lead businesses to become both environmentally and financially sustainable. Further, by helping companies see the environmental impacts of their activities, natural capital accounting encourages companies to decouple the growth of their business from their environmental impacts. For this reason, the adoption of natural capital accounting results in broader economic, social and environmental benefits than just those accruing to the individual companies.
• Natural capital accounting has the potential to transform how business is done. There is a role for both governments and business leaders to further develop natural capital accounting frameworks and to encourage their adoption.