Analysis of the rise of natural capital as an asset class
- Sylvain Richer de Forges
- May 19
- 1 min read
From Externality to Asset Class: The Rise of Natural Capital
For too long, nature has been treated as an externality—something free, abundant, and outside of financial systems. But this outdated view is shifting rapidly. Natural capital is now being recognized as an asset class, with companies and investors factoring ecosystems into risk assessments, balance sheets, and investment strategies.
Why the shift? A few key drivers:
Regulatory Pressures – Governments and financial regulators are integrating biodiversity and ecosystem risks into disclosure frameworks. The Taskforce on Nature-related Financial Disclosures (TNFD) is shaping how businesses account for nature.
Financial Innovation – New financial instruments like biodiversity credits, green bonds, and ecosystem service payments are emerging, allowing investors to directly value and protect natural assets.
Corporate Strategy – Forward-thinking companies are moving beyond carbon to embed nature in their sustainability strategies, recognizing that deforestation, water scarcity, and soil degradation pose real financial risks.
Technology & Data – AI, remote sensing, and blockchain are improving how we measure and verify natural capital, making it more investable and accountable.
The transition isn’t just theoretical—it’s happening now. From Singapore’s mangrove restoration bonds to Indonesia’s carbon pricing for forestry, Southeast Asia is becoming a hotspot for nature-based finance.
As natural capital moves from an externality to an asset class, the challenge is ensuring that valuation leads to protection, not exploitation. How can businesses strike that balance? Let’s discuss.
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