Thriving natural capital

Our goal is to enhance the integrity of nature markets to drive climate action, nature recovery and community benefit. Scotland's natural capital is essential to addressing UN Sustainable Development Goals. Our work focuses on advancing the science of ecosystem services and informing on the restoration of natural capital and its sustainable use.

What is natural capital?

Natural capital can be defined as 'renewable and non-renewable stocks of natural assets, including geology, soil, air, water and all living things, that combine to yield a flow of benefits to people' (Scottish Forum). It is a concept that enables us to think of our natural environment as an asset that provides ecosystem services beneficial to our society and economy.

Some of these, like food, are 'private goods' because individuals can own and profit from them. 'Public goods', like climate change mitigation, are available to anyone, and society benefits, rather than individuals.

Many businesses rely on natural capital and ecosystem services and they'll invest in nature, to protect their private goods. It is harder to justify investing in public goods, which are difficult to value and which provide benefits only in the long term. Investing in public goods will also, of course, benefit a business' competitors.

As a result, many business decisions generate short-term private benefits at the expense of longer-term public benefits. This leads to costs to the environment, such as pollution, flooding or climate change, that then have to be met by governments.

For example, agricultural production leads to private goods (the harvest) for the producer, whilst generating environmental costs (such as its carbon footprint). Funding from either public or private sources may be offered to farmers, to encourage more sustainable practices that primarily benefit the public over the long term, rather than providing short-term private benefits.