Ideas From the Speakers

This session looked at what it would mean to bring the value of nature–especially the ocean and cryosphere–into financial systems, or “putting nature on the balance sheet.” This would help make environmental impacts more visible in economic decision-making, instead of treating nature as something separate or easy to ignore. One starting point was how to translate scientific understanding into something that can be used by companies and financial institutions. This could mean ecological limits and thresholds while helping companies create a clearer link between science and action. It also raises the question of how these targets are later reflected in financial decisions. A bigger issue is that most environmental impacts are treated as externalities. Companies can generate profit while the environmental costs are absorbed more broadly by society. By bringing nature onto the balance sheet we recognize the negative impacts of business activity as well as the value of ecosystems that are often taken for granted. Many natural systems, especially in the ocean and cryosphere, function as public goods, and “markets can’t take care of public goods because they only trade private things…You cannot trade rainfall.” These natural systems provide shared benefits like climate regulation, water systems, and biodiversity, but don’t have clear ownership or pricing structures, which makes it difficult to apply any kind of market logic. Not everything can be easily priced or traded, especially when it comes to nature. There was also discussion about how existing accounting tools might begin to incorporate these ideas. Concepts like contingent liabilities and replacement costs were mentioned as possible ways to account for environmental risks and dependencies. This would allow companies to see potential future costs tied to environmental damage, even if those costs are not immediate. The role of financial institutions came up repeatedly. Banks, insurers, and asset managers were seen as key actors, particularly if they can begin to treat environmental impacts as financial risks. But it was clear that this kind of shift would likely depend on policy and regulation to create the right incentives and expectations.

Insights From the Audience

The discussion that followed focused more on what this would look like in practice, and where the biggest challenges might come from. One of the main concerns was liability. If companies are required to account for the environmental damage they cause, many existing business models could become unprofitable. This makes resistance to these changes likely, especially from industries that depend on externalizing those costs. Some participants pointed to early adopters, including certain countries and financial institutions, as important starting points on leading this transition. Others suggested that without stronger regulation, progress will remain slow and uneven. Governance came up with respect to marine environments. In areas like the high seas or the cryosphere, there is no clear authority responsible for managing or enforcing accountability. One idea was how financial institutions could begin to treat environmental externalities as financial risk. For example, companies with higher environmental impact could have higher borrowing costs which would create an incentive to reduce harm, rather than relying on voluntary commitments. There was skepticism about relying too much on markets to solve these challenges. Since many ecosystem services are public goods, they don’t fit easily into systems designed for private exchange. This raises the question of whether market-based solutions alone are enough, or if stronger policy interventions are needed. Reflections and Next Steps How we think and talk about value was the being takeaway from this session. Right now, many natural systems are only recognized economically when they are extracted or used. A forest has value when it is cut down and sold, but not necessarily when it is left standing, even though it plays a significant role in carbon storage, biodiversity, and water systems. Shifting this mindset, “that a tree is more valuable alive than chopped down,” is a key part of what putting nature on the balance sheet is trying to do. But trying to force all aspects of nature into financial terms risks oversimplifying what is actually at stake. This is not just about assigning numbers, but about making better decisions with a clearer understanding of what is being gained or lost. If the concept of “nature on the balance sheet” stays within technical or financial circles, it will be difficult to build broader support. Connecting these ideas to everyday realities, and making them easier to understand, will be important for long-term change. A big win will be in making these ideas more accessible. Moving from a system where environmental impacts are mostly invisible, to one where they are fully accounted for, will take time. But while this is still a work in progress, a shift is already starting, and that there are concrete ways to begin building toward it.