{"componentChunkName":"component---src-gatsby-entities-reflection-tsx","path":"/perspectives/turning-points-for-nature-nature-on-the-balance-sheet-villars-rapporteur-report","result":{"data":{"platform":{"reflection":{"id":"6810a29334279d2cbf7738b1","slug":"turning-points-for-nature-nature-on-the-balance-sheet-villars-rapporteur-report","path":"/perspectives/turning-points-for-nature-nature-on-the-balance-sheet-villars-rapporteur-report","name":"Turning Points for Nature: Nature on the Balance Sheet – Villars Rapporteur Report","name_fr":null,"title":null,"title_fr":null,"pretitle":null,"pretitle_fr":null,"subtitle":null,"subtitle_fr":null,"published":"2025-06-13T09:23:21.41","edited":null,"content":{"plain":"Ideas from the Speakers\nThe session enabled a productive discussion on one of the key challenges in the net-zero, nature-positive transition: valuing the natural environment and global commons in our economic system. In simple terms, experts argue that our current way of producing and consuming products has negative effects on society and nature (what economists refer to as externalities), and that the price of goods and services does not actually reflect the cost of this damage. Among the ways to address this involves efforts to incorporate externalities on corporate financial balance sheets, representing them as liabilities if the effect is negative, or as assets should the effect be positive. In the context of nature, incorporating this on the balance sheet makes pursuing a net nature-positive approach an obvious choice since it assigns monetary value that our economic system values. Concerningly enough, as per one expert, only about 7% of companies have performed an assessment on natural capital (including roughly 25% of the S&P 500). \nThe speakers shared a document they compiled, titled “The Roadmap for Putting Nature on the Balance Sheet,” the result of a discussion at last year’s Villars Institute Summit. All the speakers placed significant emphasis on this paper, which describes some of the key challenges to putting nature on the balance sheet: current efforts are siloed, slow in pace, and susceptible to disruption. More concretely, a lack of clarity exists on how nature capital should affect corporate decision-making, and mobilizing actors and engaging the right stakeholders are challenging. The question of how to derive financial value from nature capital remains, and there appears to be a shortage of clear, proven models to follow. \nThe primary goal of this session was to share the progress made with the creation of the roadmap and to engage participants to contribute and provide inputs on the initiative’s direction. An expert introduced the ideas by focusing on scientist Johan Rockström’s planetary boundaries within the context of the current economic system, which works unsustainably and outside the planet’s safe operating limits. The question was how to transform this narrative, and the conclusion was that incorporating nature on the balance sheet is one of the key tools at our disposal. \nThe same speaker shared the biggest breakthrough of the roadmap: a chart explaining the three main steps in the journey to fully recognizing natural capital on balance sheets. The first step is conducting an assessment based on trusted data to determine the value of natural capital for a specific entity. This is followed by an accounting process that quantifies the value of the natural capital to business and society. That value is then recognized in official financial accounts, where it is reflected as either an economic benefit or a liability. Broadly, the first steps focus on reporting the status and actions, while the later stages focus on recognizing value, incentivizing action. \nThe core assumption is that recognizing natural capital challenges the “business as usual” mindset by presenting natural capital as an asset, affecting both investor conversations and decisions made from the bottom up. \nA speaker raised the idea that the corporate world is run by accountants who tend to be risk averse because fundamental mistakes can have significant consequences. This raises the real question of how to get compliance on their side, which became a major topic of discussion in the group. \nInsights from the Audience\nOne question centered on how to shift from measurements to action and align this initiative with existing standards. Speakers clarified that they communicate with existing standard setters, such as the International Sustainability Standards Board and the Corporate Sustainability Reporting Directive, aligning and learning from each other. \nIn the breakout sessions, one group focused on accounting and developed some short- and long-term goals to pursue. Natural capital can be easily included in the notes to the financial statements section of balance sheets, allowing it to be included without immediate fiscal impact, with the long-term goal of incorporating it directly into the balance sheet. A participant noted that involving those responsible for finances in the discussion, such as chief financial officers (CFOs) and accountants, would allow them to become ambassadors for the mission. The group saw this as a point of entry for the Villars Institute, which could help convene CFOs and accountants to engage them in the discussion. \nThe breakout group on lawmakers and regulators reported that better laws and regulation, while often challenging to implement, can help accelerate this work, especially if initially there is a do-no-harm policy for entities that choose to voluntarily incorporate natural capital on the balance sheet. These actors can also encourage smaller-scale, sector-specific initiatives that enable meaningful action and accelerate progress by reducing bureaucracy. \nA group of price setters focused on the idea of viewing healthy natural capital as a valuable asset at risk of being degraded. The focus was on the long-term cost-benefit of doing the right thing (as opposed to the well-known cost of inaction) and how this perspective should influence regulators, rating agencies, and tax policy decisions. \nThe group examining industry proof points focused on studies in the food and pharmaceutical sectors, many linked to Scandinavian countries where natural capital is often viewed as a shared community asset. Their discussion emphasized spatial awareness of the future and the recognition that current risks already exist. \nNotably, one of the key challenges is the role-play problem, which suggests that all actors individually say they can do their part but feel that others are barriers. This highlights the nature of a systems challenge and emphasizes the need to bring the right stakeholders together to address issues holistically, breaking down silos to find the most common-sense path forward. \n","text":"## Ideas from the Speakers \nThe session enabled a productive discussion on one of the key challenges in the net-zero, nature-positive transition: valuing the natural environment and global commons in our economic system. In simple terms, experts argue that our current way of producing and consuming products has negative effects on society and nature (what economists refer to as externalities), and that the price of goods and services does not actually reflect the cost of this damage. Among the ways to address this involves efforts to incorporate externalities on corporate financial balance sheets, representing them as liabilities if the effect is negative, or as assets should the effect be positive. In the context of nature, incorporating this on the balance sheet makes pursuing a net nature-positive approach an obvious choice since it assigns monetary value that our economic system values. Concerningly enough, as per one expert, only about 7% of companies have performed an assessment on natural capital (including roughly 25% of the S&P 500). \n\nThe speakers shared a document they compiled, titled “The Roadmap for Putting Nature on the Balance Sheet,” the result of a discussion at last year’s Villars Institute Summit. All the speakers placed significant emphasis on this paper, which describes some of the key challenges to putting nature on the balance sheet: current efforts are siloed, slow in pace, and susceptible to disruption. More concretely, a lack of clarity exists on how nature capital should affect corporate decision-making, and mobilizing actors and engaging the right stakeholders are challenging. The question of how to derive financial value from nature capital remains, and there appears to be a shortage of clear, proven models to follow. \n\nThe primary goal of this session was to share the progress made with the creation of the roadmap and to engage participants to contribute and provide inputs on the initiative’s direction. An expert introduced the ideas by focusing on scientist [Johan Rockström’s planetary boundaries](https://tnfd.global/knowledge-bank/johan-rockstrom-planetary-boundaries-scientific-advances/) within the context of the current economic system, which works unsustainably and outside the planet’s safe operating limits. The question was how to transform this narrative, and the conclusion was that incorporating nature on the balance sheet is one of the key tools at our disposal. \n\nThe same speaker shared the biggest breakthrough of the roadmap: a chart explaining the three main steps in the journey to fully recognizing natural capital on balance sheets. The first step is conducting an assessment based on trusted data to determine the value of natural capital for a specific entity. This is followed by an accounting process that quantifies the value of the natural capital to business and society. That value is then recognized in official financial accounts, where it is reflected as either an economic benefit or a liability. Broadly, the first steps focus on reporting the status and actions, while the later stages focus on recognizing value, incentivizing action. \n\nThe core assumption is that recognizing natural capital challenges the “business as usual” mindset by presenting natural capital as an asset, affecting both investor conversations and decisions made from the bottom up. \n\nA speaker raised the idea that the corporate world is run by accountants who tend to be risk averse because fundamental mistakes can have significant consequences. This raises the real question of how to get compliance on their side, which became a major topic of discussion in the group. \n\n## Insights from the Audience \n\nOne question centered on how to shift from measurements to action and align this initiative with existing standards. Speakers clarified that they communicate with existing standard setters, such as the [International Sustainability Standards Board](https://www.ifrs.org/groups/international-sustainability-standards-board/) and the [Corporate Sustainability Reporting Directive](https://kpmg.com/nl/en/home/topics/environmental-social-governance/corporate-sustainability-reporting-directive.html), aligning and learning from each other. \n\nIn the breakout sessions, one group focused on accounting and developed some short- and long-term goals to pursue. Natural capital can be easily included in the notes to the financial statements section of balance sheets, allowing it to be included without immediate fiscal impact, with the long-term goal of incorporating it directly into the balance sheet. A participant noted that involving those responsible for finances in the discussion, such as chief financial officers (CFOs) and accountants, would allow them to become ambassadors for the mission. The group saw this as a point of entry for the Villars Institute, which could help convene CFOs and accountants to engage them in the discussion. \n\nThe breakout group on lawmakers and regulators reported that better laws and regulation, while often challenging to implement, can help accelerate this work, especially if initially there is a do-no-harm policy for entities that choose to voluntarily incorporate natural capital on the balance sheet. These actors can also encourage smaller-scale, sector-specific initiatives that enable meaningful action and accelerate progress by reducing bureaucracy. \n\nA group of price setters focused on the idea of viewing healthy natural capital as a valuable asset at risk of being degraded. The focus was on the long-term cost-benefit of doing the right thing (as opposed to the well-known cost of inaction) and how this perspective should influence regulators, rating agencies, and tax policy decisions. \n\nThe group examining industry proof points focused on studies in the food and pharmaceutical sectors, many linked to Scandinavian countries where natural capital is often viewed as a shared community asset. Their discussion emphasized spatial awareness of the future and the recognition that current risks already exist. \n\nNotably, one of the key challenges is the role-play problem, which suggests that all actors individually say they can do their part but feel that others are barriers. This highlights the nature of a systems challenge and emphasizes the need to bring the right stakeholders together to address issues holistically, breaking down silos to find the most common-sense path forward. "},"content_fr":{"plain":"","text":""},"openGraph":{"title":null,"description":{"plain":"Biodiversity underpins over half of global GDP, approximately $44 trillion, by supporting essential ecosystem services such as food provision, water purification, and climate regulation, yet its assets are rarely accounted for on balance sheets and in investment decisions. How can the Villars community work together to reach a turning point that delivers a decisive gain for planetary health? The following is the rapporteur report of an expert discussion convened under the Chatham House rule. The author is a Villars Fellow. \n"},"image":{"url2x":null,"thumbnails":{"card":{"url":"https://res.cloudinary.com/shapeable/image/upload/c_limit,w_480/v1745920518/villars-institute/banner/h-1_image__54399713218_8ffbb4881b_k_ijpnsq.jpg","url2x":"https://res.cloudinary.com/shapeable/image/upload/c_limit,w_960/v1745920518/villars-institute/banner/h-1_image__54399713218_8ffbb4881b_k_ijpnsq.jpg"},"mainBanner":{"url":"https://res.cloudinary.com/shapeable/image/upload/c_limit,w_1440/v1745920518/villars-institute/banner/h-1_image__54399713218_8ffbb4881b_k_ijpnsq.jpg","url2x":"https://res.cloudinary.com/shapeable/image/upload/c_limit,w_2880/v1745920518/villars-institute/banner/h-1_image__54399713218_8ffbb4881b_k_ijpnsq.jpg"}}}},"challenge":null,"color":null,"typeLabel":"New View","intro":{"plain":"Biodiversity underpins over half of global GDP, approximately $44 trillion, by supporting essential ecosystem services such as food provision, water purification, and climate regulation, yet its assets are rarely accounted for on balance sheets and in investment decisions. How can the Villars community work together to reach a turning point that delivers a decisive gain for planetary health? The following is the rapporteur report of an expert discussion convened under the Chatham House rule. The author is a Villars Fellow. \n","text":"Biodiversity underpins over half of global GDP, [approximately $44 trillion](https://www.weforum.org/press/2020/01/half-of-world-s-gdp-moderately-or-highly-dependent-on-nature-says-new-report/), by supporting essential ecosystem services such as food provision, water purification, and climate regulation, yet its assets are rarely accounted for on balance sheets and in investment decisions. How can the Villars community work together to reach a turning point that delivers a decisive gain for planetary health? The following is the rapporteur report of an expert discussion convened under the Chatham House rule. The author is a Villars Fellow. "},"intro_fr":{"plain":"","text":""},"outro":{"text":"### The Author\nMatteo Markel is a Villars Fellow and was assigned as an official rapporteur of the 2025 Villars Institute Summit."},"outro_fr":{"text":""},"videos":[],"imageAssets":[],"organisations":[],"challenges":[],"authors":[{"id":"65d547fed5bcca2bcbc9ea62","name":"Matteo Markel","slug":"matteo-markel","role":{"id":"rol_m02v21Sk7a2hKGj7","name":"Fellow"},"isMember":true,"bio":{"id":"65d547fed5bcca2bcbc9ea62_bio","text":"Hey! I'm an undergraduate student born and raised in Zug, Switzerland. I'm really interested in sustainability and the natural sciences and believe that finding ways for humanity to develop sustainably in cooperation with nature is both the most significant challenge of our time but also the biggest opportunity to further the common good. \n\nIn high school, I had the privillage of supporting the development of my school's aquaponics system, a place where plants and fish are raised together symbiotically and in a manner that results in significant benefits for both organisms. I also had a lot of fun collabrating with other students on the school's Sustainability Initiative, specifically the Carbon Fund, a pilot project to offset our schools carbon emissions and encourage community members to do the same. \n\nDuring my gap year, I had a great time running The Earth Prize's sustainability podcast Unpolluted, and started developing a social enterprise platform for tokenising nature and driving funding to grassroots initatives. \n\nI'm excited about biology, environmental entrepreneurship and sustainable development. Feel free to reach out if you want to share ideas, work on a project or simply say hello!","html":"

Hey! I'm an undergraduate student born and raised in Zug, Switzerland. I'm really interested in sustainability and the natural sciences and believe that finding ways for humanity to develop sustainably in cooperation with nature is both the most significant challenge of our time but also the biggest opportunity to further the common good.

\n

In high school, I had the privillage of supporting the development of my school's aquaponics system, a place where plants and fish are raised together symbiotically and in a manner that results in significant benefits for both organisms. I also had a lot of fun collabrating with other students on the school's Sustainability Initiative, specifically the Carbon Fund, a pilot project to offset our schools carbon emissions and encourage community members to do the same.

\n

During my gap year, I had a great time running The Earth Prize's sustainability podcast Unpolluted, and started developing a social enterprise platform for tokenising nature and driving funding to grassroots initatives.

\n

I'm excited about biology, environmental entrepreneurship and sustainable development. Feel free to reach out if you want to share ideas, work on a project or simply say hello!

\n"},"organisation":{"id":"65d547d5d5bcca2bcbc9e158","name":"Villars Institute"},"linkedin":"https://www.linkedin.com/in/matteo-markel/","photo":{"id":"image_villars-institute/person/matteo-markel_photo__matteo-markel_photo__OH7A2614_copy_2_wb8euj_cmunxi","url":"https://res.cloudinary.com/shapeable/image/upload/v1753193599/villars-institute/person/matteo-markel_photo__matteo-markel_photo__OH7A2614_copy_2_wb8euj_cmunxi.jpg","url2x":null},"positions":[{"id":"65d547e2d5bcca2bcbc9e3f1","primary":null,"positions":[{"id":"65d54818d5bcca2bcbc9f0cf","name":"Alumni","name_fr":null},{"id":"65d54818d5bcca2bcbc9f2ce","name":"Student","name_fr":null}],"organisation":{"id":"65d547d5d5bcca2bcbc9e01b","name":"International School of Zug and Luzern"}},{"id":"67725c178e74f03e2a852e25","primary":null,"positions":[{"id":"65d54818d5bcca2bcbc9f2ce","name":"Student","name_fr":null}],"organisation":{"id":"66f315feb565e59d1a80979e","name":"Harvard College"}},{"id":"677265468e74f03e2a852e36","primary":null,"positions":[{"id":"65d54818d5bcca2bcbc9f133","name":"Content Producer","name_fr":"Producteur De Contenus"}],"organisation":{"id":"65d547d5d5bcca2bcbc9e10c","name":"The Earth Foundation"}},{"id":"68df2449f23bdd9a4ea84eda","primary":null,"positions":[{"id":"65d54818d5bcca2bcbc9f288","name":"Project Intern","name_fr":null}],"organisation":{"id":"6790b25154af40ffc7cd16b4","name":"Crowther Lab & Restor"}},{"id":"69317ad75fdee034f55cdba5","primary":true,"positions":[{"id":"693179755fdee034f55cdb42","name":"2022 Villars Fellow","name_fr":null}],"organisation":{"id":"65d547d5d5bcca2bcbc9e158","name":"Villars Institute"}}]}],"people":[],"embeds":{"citations":[],"advertisements":[],"pages":[],"people":[],"imageAssets":[]},"banner":{"id":"6810a20a34279d2cbf7738a5","name":"h","slug":"h-1","title":null,"description":{"text":""},"alternateText":null,"image":{"id":"image_villars-institute/banner/h-1_image__54399713218_8ffbb4881b_k_ijpnsq","url":"https://res.cloudinary.com/shapeable/image/upload/v1745920518/villars-institute/banner/h-1_image__54399713218_8ffbb4881b_k_ijpnsq.jpg","url2x":null,"width":2048,"height":1366,"thumbnails":{"id":"thumbnails-file_villars-institute/banner/h-1_image__54399713218_8ffbb4881b_k_ijpnsq","mainBanner":{"url":"https://res.cloudinary.com/shapeable/image/upload/c_limit,w_1440/v1745920518/villars-institute/banner/h-1_image__54399713218_8ffbb4881b_k_ijpnsq.jpg","url2x":"https://res.cloudinary.com/shapeable/image/upload/c_limit,w_2880/v1745920518/villars-institute/banner/h-1_image__54399713218_8ffbb4881b_k_ijpnsq.jpg"}}}}}}},"pageContext":{"lang":{"id":"en","path":"","iso":"en","name":"English","label":"English"},"availableEntities":["Challenge","Page","Post","Reflection","Video","Podcast","Event"],"detailEntities":["Challenge","Page","Post","Reflection","Video"],"site":{"id":"683e8bff7c32c7910387b3d5","slug":"villars-review","name":"Villars Review","url":"https://villarsreview.org","title":null,"twitter":"https://twitter.com/VillarsIdeas","threads":null,"facebook":"https://www.facebook.com/villarsinstitute","linkedin":"https://www.linkedin.com/company/the-villars-institute/","instagram":"https://www.instagram.com/villarsinstitute/","flickr":"https://www.flickr.com/people/195926075@N05/","tiktok":"https://www.tiktok.com/@villarsinstitute","youtube":null,"ownerName":"Villars Institute","recaptchaKey":"6Lc7c1crAAAAADUXSkkV_0zMMbEZ2qQMtw2gMAVM","googleSiteVerification":"GqkDXBfnLuGbzO9gmQM8_4BpSOVP4ZPITWqdFJibuww","platformName":"The Villars Institute Community Platform","platformUrl":"https://community.villarsinstitute.org","supportEmail":null,"contactEmail":null,"mainMenu":{"id":"6840fbbed6341c85fc259cdf","slug":"villars-review-navigation"},"linearMenu":null,"entityViews":[],"entityAppViews":[],"entityOnboardingViews":[],"gptLanguages":[],"gptQuestionTemplate":null,"advertisements":[],"logoVerticalOffset":null,"logoHorizontalOffset":null,"logoVerticalOffsetMobile":null,"logoHorizontalOffsetMobile":null,"logoVerticalOffsetTablet":null,"logoHorizontalOffsetTablet":null,"logoVerticalOffsetDesktop":null,"logoHorizontalOffsetDesktop":null,"logoHeightMobile":null,"logoHeightTablet":null,"logoHeightDesktop":null,"headerHeightMobile":null,"headerHeightTablet":null,"headerHeightDesktop":null,"logo":{"url":"https://res.cloudinary.com/shapeable/image/upload/v1749086205/villars-institute/site/villars-review_logo__villars-logo_dsjrab.png","type":"image/png","width":708,"height":207},"logoInverted":{"url":"https://res.cloudinary.com/shapeable/image/upload/v1749086215/villars-institute/site/villars-review_logoInverted__villars-logo-inverted_mi8gbd.png","type":"image/png","width":708,"height":207},"footerMenu":{"id":"6840fbbed6341c85fc259cdf","slug":"villars-review-navigation"},"footerSecondaryMenu":null,"footerContent":{"text":""},"creator":null,"poweredBy":{"id":"65d547d5d5bcca2bcbc9e0d0","name":"Shapeable","slug":"shapeable","url":"https://shapeable.ai","logo":{"url":"https://res.cloudinary.com/shapeable/image/upload/v1684216592/villars/organisation/shapeable_logo__shapeable-logo_yd2tkk.png.png","type":"image/png","width":612,"height":186},"logoInverted":{"url":"https://res.cloudinary.com/shapeable/image/upload/v1684216599/villars/organisation/shapeable_logoInverted__shapeable-logo-inverted_mltax4.png.png","type":"image/png","width":612,"height":186},"logoSubtle":null},"poweredByLabel":null,"poweredByContent":{"text":""},"explorerPage":null,"termsPage":{"name":"Terms Of Use - Villars Review","title":"Terms Of Use","slug":"terms-of-use-villars-review","path":"/terms"},"homePage":{"name":"Home - Villars Review","title":"Home","slug":"home-villars-review","path":"/"},"knowledgeHubPage":null,"privacyPolicyPage":{"name":"Privacy Policy - Villars Review","title":"Privacy Policy","slug":"privacy-policy-villars-review","path":"/privacy-policy"},"summary":{"text":""},"thumbnail":null,"openGraph":{"title":null,"date":"2026-07-30T15:07:02.38","description":null,"image":null},"termsAndConditions":{"text":""},"privacyPolicy":{"text":""},"welcomeUrl":"https://villarsreview.org/app/welcome","welcomeTitle":null,"invitationAction":"join the Villars Review community","setupCompletionMessage":null,"languages":[],"brandColors":[],"showLogin":null,"showShareMenu":null,"showFollowMenu":null,"showPlatformLogin":true,"showContactUs":null,"loginLabel":null,"platformLoginLabel":"Community Login","headerButtons":[{"id":"6949f0b96995bed47c9f9e0a","name":"Subscribe","slug":"subscribe","page":null,"label":"Subscribe","url":null,"isDownload":null,"color":{"id":"65d5479fd5bcca2bcbc9db6a","name":"Yellow - SDG 7","slug":"yellow-sdg-7","value":"#FAB702"},"icon":{"id":"6949f0936995bed47c9f9e06","name":"Plus Icon Glyph","slug":"plus-icon-glyph","component":"PlusIconGlyph"}},{"id":"69b35e5cc9cd9c06e35764a2","name":"Contact Us Iframe button","slug":"contact-us-iframe-button","page":null,"label":"Contact Us","url":null,"isDownload":null,"color":null,"icon":null}]},"includeProfile":false,"disableProfileEditing":false,"dynamicEntityTypeNames":[],"id":"6810a29334279d2cbf7738b1","slug":"turning-points-for-nature-nature-on-the-balance-sheet-villars-rapporteur-report","entityPath":"/perspectives/turning-points-for-nature-nature-on-the-balance-sheet-villars-rapporteur-report","openGraph":{},"entityTypeName":"Reflection","name":"Turning Points for Nature: Nature on the Balance Sheet – Villars Rapporteur Report","__type":"Reflection"}},"staticQueryHashes":["1221201636","1267062116","1283216598","1357869590","1424666086","1494373414","1505804561","1642514827","1906697477","2016388789","2065593444","2178469144","2252425139","227495051","2338984618","2952590632","3002076743","3190044573","3300161794","3381667819","3624873332","3685893834","3805653892","3868936251","387122360","4051288826","418456406","4285939262","474642757","5795397","725157280","857874215"]}