What is natural capital and why does it matter to the economy?

The economy rests on nature, not the other way around

Every economic supply chain begins with something nature provides: water, fertile soil, pollinators, a stable climate, raw materials. Economists call this stock natural capital, and the flows derived from it ecosystem services. These are the part of the balance sheet that appears in no balance sheet — until a service breaks down: flooding where hillsides no longer hold back water, declining harvests where pollinators disappear. Then the invisible value presents its bill, with interest.

Ecosystem services, in practice

Four families. Provisioning: food, water, timber, fibres. Regulating: the local climate moderated by trees, floods absorbed by wetlands, filtered air, pollination. Supporting: soil formation, nutrient cycles. Cultural: wellbeing, beauty, the identity of places. A single well-preserved hectare works across all four families simultaneously — it is the multiplier that makes investments in nature so efficient.

Why it is now a business topic

Three reasons converge. Risk: businesses depend on nature more than they realise — agricultural supply chains, process water, territorial stability — and nature-related risks are entering the assessments of banks and insurers. Rules: European reporting requires companies to disclose their impacts and dependencies on biodiversity. Reputation: local communities and customers reward those who regenerate and penalise those who degrade. Nature has moved from an environmentalists' concern to a chapter in risk management.

Measuring nature: difficult but possible

Biodiversity has no single unit like the kWh, but it can be measured: hectares conserved or regenerated, trees planted and surviving (survival is the honest figure), species recorded, soil de-sealed, water retained. The Simbial rule applies here too: physical indicators, declared methodology, evidence — and transparency about the fact that some benefits take years to materialise, not weeks. Nature teaches patience to those who measure it as well.

The lesson for those starting the journey

Those who work in nature learn a perspective that is valuable across all sectors: protecting what already works is almost always the highest-return investment; consistency beats spectacle; the greatest impact is often the one that goes unseen. The next instalments bring this perspective into cities — where nature is scarcer and more precious than ever.