There is a need for a fundamental shift in our economic system, one that integrates nature into economic and financial decisions. Nature is a critical asset for future growth, for businesses, economies, and societies at large: this recognition will drive economic stability, manage physical and transition risks, and create a new nature-based model of inclusive development.
A critical step is to put nature on the balance sheet and work so that nature’s economic value is recognized by legislators and markets.
The Nature on the Balance Sheet Initiative (NBI) has initiated a roadmap to make this happen.
How to put ‘nature on the balance sheet’: from natural capital assessment to value recognition
Land stewards, companies, and investors who own, or control natural capital (natural asset custodians) can put nature on the balance sheet through three actions:
- 1 – DISCOVER
Discovering value based on trusted data. Natural capital assessment involves using trustworthy, and ongoing data to understand how nature impacts us and how we affect nature. It focuses on identifying and managing risks, opportunities, and our reliance on nature. The process helps prioritize actions to protect and enhance nature. - 2 – QUANTIFY
Quantifying value to business and society. Natural capital accounting measures and organizes data about natural assets such as forests and water (stocks), the services they provide, like clean air and recreation (ecosystem service flows), and their value to businesses and society. To accurately capture stakeholders and beneficiaries, it is essential to consider the entire socio-ecological landscape, not just the area managed by a single land steward. - 3 – RECOGNIZE
Recognizing value in financial accounts. Natural capital is included in financial statements under international accounting standards to account for nature’s impact on the valuation of financial assets and liabilities. This recognizes the financial value of nature for asset custodians through transactions and contracts. A single set of integrated accounts allows for incorporating natural capital into decision-making and reporting via a unified balance sheet and income statement.
Scaling up natural capital value recognition at a system level
The three action-inclusion of nature-linked assets and liabilities in audited financial statements is the necessary condition for recognition of nature’s values. The sufficient condition is the recognition of that value by financial markets, tax authorities and legislators.
The Nature on the Balance Sheet initiative is:
- Driving a massive recognition of natural assets, subject to natural capital impacts and dependencies;
- Creating new asset classes to invest into better nature outcomes (esp. intangible assets, debt and equity assets);
- Ensuring price signals through transparent market interactions;
- Driving sector transitions towards ‘nature-positive’ products and services;
- Including nature in prudential capital regulation and capital adequacy rules, and central bank stress-testing.
This shift relies on core enablers to catalyze the market shift, including:
- Data, metrics & method providers;
- Standard setters;
- Assurance providers, auditors & actuaries;
- Law makers and regulators;
- Price setters and market enablers;
- Corporate changes agents (e.g. company accountants, technical specialists and general counsel);
- Other societal enablers (e.g. regulation, policy, and public opinion).
The roadmap (linked to the right-hand side of this page) lays out a practical path which can generate breakthrough results in time for the climate COP30 in Brazil in 2025. The roadmap includes also proof points of leading companies across sectors and geographies recognizing the value for nature, and key enablers shifting to support value recognition at scale.
Proof Points – Discovering, quantifying and recognizing value
Including nature in the balance can improve decision-making and recognize nature as an asset to be preserved and enhanced. The Roadmap is being tested in 2025 by several companies in real landscapes or proof points. Proof point hosts have developed their natural capital accounts to quantify value and are currently exploring how to recognize that value in their financial accounts. Proof point hosts have been closely working with Nature on the Balance Sheet Initiative to scope their accounts, collect the data, and develop their accounts, but more importantly, to identify value creation mechanisms and the next steps to realize them.
As this phase of the project ends in 2025, the proof point host will continue their journey to put Nature on the Balance on their own. Below is an overview of their journey.
- Belterra
Belterra works with farmers in Brazilian Amazon to shift degraded pastureland to biodiverse agroforestry systems that improve productivity while helping conserve critical biomes. Its model combines technical assistance, blended finance, and commercial partnerships to support transitions at scale.
Belterra is working in partnership with the Nature on the Balance Initiative to quantify, verify, and value in monetary terms the ecosystem service benefits, as well as exploring how to embed this value into outcome-linked offtake contracts to reward regenerative farming, attract funders, and offer buyers a traceable, climate-aligned supply of cocoa that outperforms monoculture, both ecologically and financially. - Manulife Investment Management
Manulife Investment Management is one of the world’s largest natural capital investors, managing US$11.5 billion (2024) in timber assets across 5 million hectares of timberland. Manulife has piloted natural capital accounting to demonstrate how nature contributes to long-term asset performance.
The pilot project to explore the inclusion of nature on the balance sheet focuses on linking ecosystem services directly to asset performance and valuation in a riparian forest managed by Manulife in the Neches watershed in Texas. By improving wetland health and forest resilience, Manulife contributes to reduce wildfire and flood and drought risks. Manulife is exploring how these interventions can be rewarded and captured in the financial statements through an extension of timber asset durability and new revenue opportunities (such as payments for ecosystem services, biodiversity credits, and nature-linked contracts). - Vale Base Metals
Vale Base Metals is a global supplier of critical minerals (including copper, nickel and cobalt) with reserves in Canada, Brazil and Indonesia. Vale Base Metals is exploring how putting nature on the balance sheet can reinforce its existing commitments under the Taskforce on Nature-related Financial Disclosures (TNFD) and the International Council on Mining and Metals (ICMM) by recognizing natural capital as an intangible asset that safeguards the long-term viability of mining operations.
The company has piloted natural capital accounting at the Carajás mining complex in Brazil, mapping landscape changes from 1986 to 2023 to understand the changes on natural capital value over the time. Vale Base Metals is assessing different interventions to enhance natural capital, aiming to generating benefits for local communities and improving the business bottom line and market valuation.
Next Steps
This is the moment to build alignment around a shared roadmap and drive action for putting nature into financial statements, starting with tangible proof points of companies that successfully increase enterprise value through nature-positive action. We are discussing the roadmap with the community with a focus on identifying drivers and enablers to make this a reality.
Get in touch with us if you want to contribute to this work – info@capitalscoalition.org
