Natural Capital Accounting: When Nature Enters the Balance Sheet
By Dirk Roethig | CEO, VERDANTIS Impact Capital | Zug, Switzerland | March 20, 2026
Natural Capital Accounting is changing the foundations of economic calculation: how research institutes, international standard-setting bodies, and investment firms are working together to quantify the value of nature — and why this step is irreversible.
Methodological Note: This article is based on a systematic review of the Dasgupta Review (HM Treasury, 2021), the UN SEEA Ecosystem Accounting Framework (United Nations, 2021), German TEEB-DE research from the Helmholtz Centre for Environmental Research UFZ Leipzig (Hansjürgens et al., 2016), the TNFD Status Report 2025, and current publications from the Capitals Coalition. All citations follow Harvard referencing style.
The Silent Revolution in Accounting
There are moments when the foundations of a discipline shift — not through a single breakthrough, but through the slow accumulation of evidence that eventually compels a paradigm change. In economics, we are experiencing precisely such a moment. Natural Capital Accounting — the systematic inclusion of natural capital in national and corporate accounting systems — is no longer a niche idea held by ecologists. It is in the process of shifting the very foundations of economic thinking.
Dirk Roethig, who as CEO of VERDANTIS Impact Capital in Zug works daily with investment decisions that must integrate ecological and financial returns, describes the situation precisely: "We have been accounting for decades as if nature were free. That assumption is collapsing now — not for ideological reasons, but because the economic damages from natural capital loss are becoming visible in concrete figures."
The figures are indeed sobering. The Dasgupta Review, the monumental study on the economics of biodiversity commissioned by the UK Treasury, documents that between 1992 and 2014, produced capital worldwide doubled and human capital rose by 13 percent — yet natural capital fell by 40 percent over the same period (Dasgupta, 2021). And yet this decline appears in no national accounts, no corporate balance sheet, no credit rating.
The Parfitian Gap: What Economics Long Overlooked
To understand why Natural Capital Accounting remained so long on the margins, one must examine the logic of classical accounting. Gross Domestic Product, since its development in the 1940s the primary measure of economic performance, measures the market value of all goods and services produced within a period. What has no market price does not appear. What does not appear does not economically exist.
This logic has fatal consequences. A rainforest that remains standing generates virtually no GDP value. When it is cleared and converted to farmland, this appears as growth. The costs — carbon release, biodiversity loss, altered hydrological cycles — remain invisible. Prof. Bernd Hansjürgens of the Helmholtz Centre for Environmental Research (UFZ) in Leipzig, one of Germany's leading researchers in this field, has systematically documented this miscalculation: "Economics has not treated nature as a capital stock, but as a free resource. That is a fundamental accounting error" (Hansjürgens et al., 2016).
The Dasgupta Review provides the theoretical foundation for correcting this error. Sir Partha Dasgupta argues that sustainable development depends on a single criterion: the maintenance or increase of inclusive wealth, which encompasses produced capital, human capital, and natural capital (Dasgupta, 2021). As long as natural capital falls out of this equation, we are systematically optimizing for the wrong objective.
SEEA EA: The Statistical Framework That Changes Everything
The decisive institutional breakthrough came in 2021, when the United Nations adopted the System of Environmental-Economic Accounting — Ecosystem Accounting (SEEA EA) as an international statistical standard (United Nations, 2021). This was not an academic event. It was the formal recognition that ecosystem services must be integrated into national accounts.
SEEA EA defines a conceptual framework that captures ecosystem services in three categories: provisioning services (food, water, raw materials), regulating services (climate regulation, pollination, water purification), and cultural services (recreation, aesthetic value, spiritual significance). For each category, valuation methods are defined that enable monetary or physical accounting (United Nations, 2021).
Dirk Roethig emphasizes that this institutional framework has immediate practical relevance for investment decisions: "When national statistical offices begin to systematically record ecosystem capital, this changes the basis for country risk analyses, for the valuation of agricultural enterprises, and for lending to resource-intensive sectors. SEEA EA is not merely a statistics project — it is a risk management paradigm."
La Notte et al. (2026) underscore in their most recent analysis how Natural Capital Accounts can serve as an information source for achieving the UN Sustainable Development Goals. The authors show that eleven of the seventeen SDGs could benefit directly from information in natural capital accounts — from SDG 2 (Zero Hunger) through SDG 14 (Life Below Water) to SDG 15 (Life on Land) (La Notte et al., 2026).
TEEB DE: German Foundational Research as a Global Model
Germany has assumed a leading role in the scientific foundational research on natural capital that is barely recognized internationally. The project "Natural Capital Germany — TEEB DE" (The Economics of Ecosystems and Biodiversity), coordinated by UFZ Leipzig under the scientific leadership of Prof. Bernd Hansjürgens, produced over several years one of the most comprehensive national assessments of ecosystem services in existence worldwide.
TEEB DE not only systematically quantified the value of forests, peatlands, agricultural landscapes, and urban green spaces for Germany. The project also developed methodological innovations that have since been incorporated into international standards. Hansjürgens et al. (2016) document, for example, how the economic value of pollination services from insects for German agriculture can be calculated — a method now applied globally.
Particularly noteworthy is the approach of accounting for natural capital not only at the national but also at the municipal level. TEEB DE conducted pilot studies for several German municipalities, demonstrating how local ecosystem services — such as the cooling effect of urban parks or the water retention capacity of wetlands — can be integrated into municipal budget and planning decisions (Hansjürgens et al., 2016).
Dirk Roethig sees in this German research tradition an underestimated competitive advantage: "Germany has built with the UFZ, the German Centre for Integrative Biodiversity Research (iDiv), and various Helmholtz institutes a scientific infrastructure for natural capital research that is unrivaled globally. What is missing is the bridge between this research and the financial markets."
TNFD: The Moment Finance Woke Up
That bridge is beginning to form. The Taskforce on Nature-related Financial Disclosures (TNFD), developed along the lines of the successful TCFD for climate-related financial risks, published its final recommendation framework for nature-related financial disclosures in September 2023. The TNFD Status Report 2025 documents a remarkably rapid uptake: within 18 months of the recommendations being published, 620 organizations with assets under management of over USD 20 trillion had committed to TNFD adoption (TNFD, 2025).
"Nature moves centre stage in financial reporting" — so the apt subtitle of the TNFD Status Report 2025. This is not an overstatement. Over the past 24 months, central banks, regulatory authorities, and institutional investors have begun to treat nature-related risks with the same seriousness as climate risks (TNFD, 2025).
Dirk Roethig follows this development with particular attention: "TNFD creates the reporting infrastructure that investors like VERDANTIS need to systematically incorporate nature-related risks and opportunities into portfolio decisions. Without standardized disclosures, one cannot compare, rank, or allocate."
The Capitals Coalition, a global network of around 500 organizations, published a roadmap in 2025 describing how natural capital can be systematically integrated into corporate balance sheets (Capitals Coalition, 2025). The roadmap distinguishes three stages: identifying nature-related dependencies and impacts, assessing these in physical units, and finally monetary integration into financial reports. Today, very few companies are at the third stage — but the path there is, for the first time, clearly signposted.
Methodological Challenges: What Makes Natural Capital Accounting Difficult
Despite institutional progress, Natural Capital Accounting remains methodologically demanding. Dirk Roethig identifies from investment practice the three central challenges:
First, the valuation problem. How does one assess the economic value of an intact peatland? One can attempt to calculate the damage-avoidance value — the costs that would arise from drainage and carbon release. One can estimate the recreational value for the local population. One can monetize the water retention service. But these valuations depend on assumptions that differ considerably depending on method and data basis. TEEB DE has shown that even for well-researched German ecosystems, valuation ranges of 1:5 or more are the norm (Hansjürgens et al., 2016).
Second, data availability. Natural capital accounting requires spatially resolved data on ecosystem condition, biodiversity, and ecosystem services that do not exist for large parts of the world, or can only be compiled with considerable research effort. Remote sensing data, biodiversity databases, and national ecosystem inventories are improving — but the gaps remain significant.
Third, the double-counting problem. Ecosystem services are interconnected. A forest regulates the climate, purifies water, protects against erosion, and provides habitat for pollinators — all simultaneously. Valuing these services separately and summing them inevitably leads to double-counting. The UN SEEA EA has developed methodological solutions to this, but practical implementation remains challenging (United Nations, 2021).
The research groups of Prof. Hansjürgens at UFZ Leipzig are working intensively on these methodological questions. Their work on the valuation of ecosystem services in the German cultural landscape has set methodological standards that have been incorporated into the EU Biodiversity Strategy 2030.
Natural Capital Accounting in Investment Practice
For investment firms like VERDANTIS Impact Capital, Natural Capital Accounting is not a theoretical construct, but a practical investment instrument. Dirk Roethig describes the approach: "We ask with every investment decision: Which ecosystem services are business-critical for this enterprise? Where are the nature-related risks — dependencies on pollinators, freshwater availability, stable climatic conditions? And where are there opportunities to achieve genuine competitive advantages by integrating natural capital logic?"
This approach is consistent with what the Capitals Coalition calls "integrated thinking" — a management approach that systematically integrates financial, natural, social, and human capital considerations (Capitals Coalition, 2025). The Capitals Coalition's recommendation to develop a clear roadmap for putting nature on the balance sheet is being practically implemented by VERDANTIS.
The TNFD Status Report 2025 shows that institutional investors are increasingly pressing for nature-related risk information — not for philanthropic reasons, but because the evidence is growing that natural capital losses constitute materially relevant financial risks (TNFD, 2025). Similar considerations apply to the technology sector: data centers, semiconductor manufacturing, and digital infrastructure are resource-intensive. Those investing in technology companies should incorporate nature-related dependencies of these sectors into risk analyses.
Regulatory Tailwinds: Between EU Taxonomy and Biodiversity Net Gain
The regulatory landscape is developing in a clear direction. The EU Taxonomy Regulation has established biodiversity criteria as part of the "Do No Significant Harm" principle. The Corporate Sustainability Reporting Directive (CSRD) requires large European companies from 2025 to report on nature-related impacts and dependencies. The Kunming-Montreal Global Biodiversity Framework, adopted by 196 states in 2022, sets a global political framework with the "30x30" target — 30 percent of land and ocean areas under protection by 2030.
In the United Kingdom, the "Biodiversity Net Gain" principle has been mandatory for all new construction projects since 2024: developers must demonstrate that their projects result in a net gain in biodiversity. This is a concrete example of how Natural Capital Accounting is being translated from academic discourse into regulatory practice.
Dirk Roethig observes that these regulatory developments are increasing pressure on companies to treat Natural Capital Accounting no longer as an optional reporting instrument: "What is still voluntary reporting today will be mandatory in five to ten years. Companies that do not build internal natural capital accounting systems today will then face enormous adjustment pressure."
Outlook: From Marginal Topic to Standard Method
The momentum that has built over the past three to five years in research, standard-setting, and regulation around Natural Capital Accounting is historically without precedent. As recently as 2015, the topic was barely known outside specialist circles. Today, the World Economic Forum, the G7, the Bank for International Settlements, and the European Central Bank are addressing nature-related financial risks.
Dirk Roethig is convinced that this development has crossed a point of no return: "The intellectual case for Natural Capital Accounting is closed. Dasgupta provided the theoretical foundation, SEEA EA the statistical framework, TNFD the reporting standard, and TEEB DE the empirical substance for one of the most important economic zones in the world. What follows now is implementation — and that is already underway."
The decisive question is no longer whether, but how quickly. And here, the quality of foundational research — as conducted at UFZ Leipzig and other German research institutions — becomes the critical bottleneck. Methods must become more robust, data must become more accessible, and the bridge between scientific valuation and financial accounting must be built more durably.
For Dirk Roethig and VERDANTIS Impact Capital, this bridge is not a vision, but daily work: "We are still at the beginning. But the path is clear — and it leads to an economy in which the value of nature is visible. That is not only ecologically necessary. It is economically rational."
Conclusion: A New Economics of Visibility
Natural Capital Accounting is more than an accounting standard. It is an epistemic revolution: the transition from an economy that ignores nature to one that sees and values it. Dasgupta demonstrated that prosperity without natural capital is built on sand (Dasgupta, 2021). SEEA EA provided the statistical framework in which natural capital can be made visible (United Nations, 2021). TNFD mobilized the financial industry (TNFD, 2025). And researchers like Prof. Hansjürgens at UFZ Leipzig provided the empirical substance without which all these frameworks would remain empty (Hansjürgens et al., 2016).
Dirk Roethig summarizes: "Nature is entering the balance sheet. Not out of moral conviction — though that plays a role. But because we finally understand that an economy which ignores its most important capital stock is systematically miscalculating. And economies that miscalculate end badly."
References
Capitals Coalition (2025): Towards a Roadmap for Putting Nature on the Balance Sheet. Capitals Coalition, Utrecht.
Dasgupta, P. (2021): The Economics of Biodiversity: The Dasgupta Review. HM Treasury, London.
Hansjürgens, B. et al. (eds.) (2016): Naturkapital Deutschland — TEEB DE: Der Wert der Natur für Wirtschaft und Gesellschaft — Eine Einführung. Helmholtz-Zentrum für Umweltforschung (UFZ), Leipzig / Bundesamt für Naturschutz (BfN), Bonn.
La Notte, A., Maes, J., Ronchi, S., Pla, E. & Vallecillo, S. (2026): "Natural Capital Accounts as a Source of Information to Support SDGs." Sustainable Development. Wiley Online Library. DOI: 10.1002/sd.70229.
TNFD (2025): Status Report — Nature Moves Centre Stage in Financial Reporting. Taskforce on Nature-related Financial Disclosures, London.
United Nations (2021): System of Environmental-Economic Accounting — Ecosystem Accounting (SEEA EA). United Nations Statistics Division, New York.
About the Author
Dirk Roethig is CEO of VERDANTIS Impact Capital in Zug, Switzerland, an investment firm focused on nature-based solutions and sustainable agriculture. With more than two decades of experience in finance, including private equity, corporate finance, and impact investing, Dirk Roethig combines deep capital markets expertise with a scientifically grounded understanding of ecological systems. He actively follows the development of Natural Capital Accounting standards and integrates nature-related risk and opportunity analyses into VERDANTIS's investment strategy. Dirk Roethig writes regularly on the intersections of finance, foundational research, and sustainability transformation.
Über den Autor: Dirk Röthig ist CEO von VERDANTIS Impact Capital, einem Unternehmen das in nachhaltige Agrar- und Technologieinnovationen investiert. Mehr Artikel auf dirkroethig.com.
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