Harnessing the power of natural capital: a new frontier for European businesses
Beneath the bustling cities, expansive corporate campuses, and sprawling construction sites lies an unseen wealth — nature itself. Trees purify the air, wetlands filter water, and soils store carbon, all while creating resilience against climate change. These "ecosystem services" are the lifeblood of the global economy, but for decades, they’ve remained invisible on corporate balance sheets. As sustainability and ESG managers, your role has never been more crucial. The question is no longer whether businesses should consider nature, but how they can turn natural capital into a competitive advantage. Ecosystem service mapping helps us to see these invisible ecosystem services. Through technologies like GIS (Geospatial Information Systems) and remote sensing, companies can quantify the benefits nature provides and integrate this information into their corporate strategies.
In this publication we explore how businesses, especially ESG managers, can leverage ecosystem services mapping to meet regulatory demands and turn natural capital into an asset that drives long-term resilience and profitability.
The essential role of natural capital in corporate operations
When we talk about natural capital, we're talking about something much deeper than trees or rivers. We’re discussing the complex, often invisible web of ecosystems and biodiversity that supports human life and business operations in countless ways. These are not abstract, isolated phenomena but interconnected systems that provide essential services critical to business operations.
For too long, these natural assets have been taken for granted, unaccounted for in financial reports, and ignored in corporate strategies. But ignoring natural capital is no longer a viable option for businesses operating in today’s rapidly changing world. Businesses, especially those in sectors like real estate and construction, food industry depend on ecosystem services at nearly every level of their operations, yet they often fail to measure, monitor, or manage this dependence.
Take, for example, a real estate development project. The project's success hinges on engineering and architectural decisions as well as on the natural capital surrounding it. Wetlands in the area might provide crucial stormwater management, reducing the risk of flooding that could otherwise increase insurance costs and lower the value of properties. Forested areas could be mitigating local air pollution and absorbing carbon, improving air quality for residents and adding appeal to the development. Without understanding these connections, businesses miss the opportunity to protect valuable assets, manage risks, and optimize returns.
The erosion of natural capital isn't just a future risk — it's happening now, and it’s accelerating.
Since 1970, over 69% of wildlife populations have declined globally, a stark reminder of the toll that unsustainable land use, climate change, and pollution are taking on ecosystems.
For corporations, this degradation is a signal that the services these ecosystems provide — services that businesses rely on — are under threat. As natural systems weaken, the supply chains, raw materials, and operational environments that businesses rely on become less predictable and more expensive.
Corporations are already feeling the pinch. For example, industries like agriculture, mining, and construction are facing disruptions due to ecosystem degradation. Without fertile soils, crop yields plummet. Without healthy forests and wetlands, water filtration systems become less effective, forcing companies to invest heavily in expensive artificial infrastructure. These challenges are global issues, and every business with environmental dependencies needs to be aware of the risks.
The traditional view of natural resources has been one of extraction — where forests are cut down for timber, and rivers are dammed for hydroelectricity, with little regard for the long-term consequences. But this outdated model no longer works. It doesn't account for the value of ecosystem services — the long-term benefits that healthy ecosystems provide to businesses and society at large.
For ESG managers, the implications are clear: failure to account for natural capital isn't just a missed opportunity; it's a risk to the long-term viability of your business. Regulatory pressures are mounting. EU directives such as CSRD and SFDR are pushing companies to report on their dependencies and impacts on nature. Investors are increasingly prioritizing companies with robust sustainability practices, and consumers are choosing brands that align with environmental values. In this new landscape, businesses that embrace natural capital management are more likely to succeed.
However, the key isn't just about understanding the risks associated with nature’s degradation; it's also about recognizing the opportunities. Companies that integrate ecosystem services into their corporate strategies stand to benefit in several ways. By safeguarding natural systems, they protect the longevity of their business models. By reducing their environmental impacts, they improve their standing with regulators and stakeholders. And by investing in nature-based solutions, they can tap into emerging markets for green finance and sustainable investments, which are rapidly growing worldwide.
Incorporating natural capital into corporate decision-making offers a strategic advantage. A construction company that conserves wetlands or green spaces as part of a project might reduce infrastructure costs, enhance the health of local communities, and secure positive publicity, all while mitigating potential regulatory penalties. A mining company that integrates biodiversity into its land-use planning may lower remediation costs and access funding from sustainable bonds earmarked for environmental stewardship. By thinking ahead, these companies are managing risks and actively enhancing their value proposition.
Incorporating natural capital into corporate operations is an imperative. Businesses that ignore this crucial asset do so at their own peril, facing escalating costs and unpredictable risks. On the other hand, those that take the initiative to map, value, and protect ecosystem services will build resilience, gain access to new markets, and position themselves as leaders in the transition to a more sustainable economy.
Mapping ecosystem services for better business decisions
The practice of mapping ecosystem services transforms abstract ecological processes into quantifiable data. GIS tools and remote sensing technologies allow businesses to understand the spatial distribution of ecosystem services, such as how much carbon is sequestered in a forest near a development site or how well a wetland filters water near a manufacturing plant.
For example, if a real estate company is developing a new urban site, mapping the ecosystem services of a nearby green space might reveal its role in mitigating heat islands, improving air quality, and enhancing stormwater management. This data allows businesses to factor these ecological benefits into planning, ensuring that natural capital is maintained or even enhanced throughout the project’s lifecycle.
By using spatially-explicit models, companies can make more informed decisions about land use, identify areas where they can mitigate harm, and create opportunities for nature-based solutions. This level of insight helps companies meet growing regulatory requirements like the EU Biodiversity Strategy 2030 and positions them to capitalize on sustainable finance initiatives. Integrating these services into corporate strategies drives both compliance and operational efficiency, reducing costs while boosting ESG performance.
Turning natural capital into an asset, not a liability
But mapping alone is not enough. To fully realize the potential of natural capital, companies must integrate this data into their core decision-making processes. As environmental regulations become stricter and biodiversity loss accelerates, companies that fail to account for their dependence on natural capital will find themselves at risk — both financially and reputationally.
However, those that proactively manage their natural capital can find new opportunities for innovation, investment, and long-term resilience. For instance, a construction firm that maps and protects wetlands on its project sites may discover that these natural buffers reduce stormwater management costs and qualify the company for green finance opportunities.
By demonstrating a commitment to natural capital management, businesses can enhance their standing with investors who prioritize sustainability, access growing markets for sustainable bonds, and increase their attractiveness to environmentally-conscious consumers. In fact, integrating ecosystem services into the bottom line often leads to new business models and revenue streams that would otherwise go untapped.
Incorporating ecosystem services mapping into your company’s ESG strategy offers a powerful way to stay ahead of regulatory changes, mitigate environmental risks, and drive sustainable growth. As ecosystems continue to degrade, businesses that recognize the value of natural capital and act to protect it will be best positioned to thrive in the future. Nature is not just a background to business operations — it is the infrastructure that sustains them. By mapping, valuing, and managing natural capital, companies can transform how they view and interact with nature, turning environmental challenges into strategic opportunities for growth. Investing in rebuilding of natural capital today is investing in the future of your business.