The Capitals Coalition says that:
‘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.’
Putting theory into practice
The Nature on the Balance Sheet Initiative from the Capitals Coalition has been piloted by three ground breaking companies: Belterra and Vale Base Metals (VBM) in South America, and Manulife Investment Management in the US.
In a detailed analysis of the project, the World Resources Institute describes each company as follows:
- Belterra, founded in 2020, works with smallholder farmers in Brazil’s Amazon and Atlantic forests to shift degraded pastureland to biodiverse agroforestry systems that improve productivity – such as for cacao production – while helping conserve critical biomes.
- VBM 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 by treating natural capital as an intangible asset that safeguards the long-term viability of mining operations.
- Manulife Investment Management is one of the world’s largest natural capital investment managers, with over $11.5 billion in timber assets across 5 million acres of timberland as of 2024. An early adopter of TNFD, Manulife has piloted natural capital accounting to demonstrate how nature contributes to long-term asset performance.
Together with The Landbanking Group, IDEEA Group worked with these companies to develop their natural capital accounts, allowing them to quantify the value of their stocks of natural capital and include this on their balance sheets.
IDEEA Group’s Senior Economic Analyst, Lachlan Dawson, says:
‘All businesses rely on nature somewhere. To build a resilient and sustainable business, natural risks and opportunities need to be considered. This pilot proved that putting nature on the balance sheet supports all organisations, from regenerative agricultural companies and multi-billion-dollar investment firms to miners. Natural capital accounting rewards you for nature-positive performance and protects you from future environmental risks.’
This work provides a basis for these companies to explore how to:
- recognise that value in their financial accounts
- identify value creation mechanisms
- take the next steps to leverage those mechanisms for financial and real-world benefits.
What does putting nature on the balance sheet look like for you?
If you’re interested in learning more about putting nature on the balance sheet in your organisation, connect with us for a free, 30-minute chat about your natural capital journey. No matter what your starting point, natural capital information can provide insights and support strategic decision-making.