Mainstreaming Natural Capital 2025

Challenges to mainstreaming natural capital2 Six complex and interlinked challenges are preventing the mainstreaming of the natural capital approach across the global economy. International efforts covered in the previous section aim to mainstream natural capital in the global economy. Collectively, experts indicate that there are six principal challenges that these efforts seek to solve, covered in this chapter. Additionally, while many organizations at the forefront of these efforts are cooperating to advance the adoption of natural capital approaches in decision-making, there remains an urgent need for a global vision that defines what “mainstreaming” natural capital means, as well as a mechanism to coordinate efforts based on such a vision, including under the auspices of the GBF. While methodologies to account for the full value of natural capital have advanced significantly, what is less clear is how to translate this accounting to new economic infrastructure that is fit for business and finance. There are few existing instruments that enable market actors and investors to move away from short-term gains in output and profit and instead reward better outcomes for nature. This persists despite significant research on the attractiveness of nature-positive business models, growing knowledge of the risks of nature loss and increasing compliance requirements for listed entities.46 There is also debate on the role of “valuation” and “pricing”. The former is the creation of both biophysical and monetary data that describes the value of natural capital in specific contexts (i.e. what it is worth) and the latter is a market-driven exercise that involves financial flows (i.e. establishment of willingness to pay and exchange of money). Consensus is lacking on the elements of natural capital that can be priced based on robust valuation, how this price is determined and the unintended incentives that pricing systems might create. For instance, if certain ecosystem services are “priced” higher than others (e.g. provisioning over regulating services), then investment in enhancing these services could perpetuate the decline of others.2.1 Unclear market mechanisms to value and/or price nature in economic and financial systems Mainstreaming Natural Capital: Advancing the Global Agenda to Integrate Nature in Decision-Making 10