Integrating natural capital valuation into policy and investment decisions is essential for sustainable development and the long-term health of ecosystems. By incorporating natural capital into economic analysis, policymakers and businesses can make more informed decisions. Many ecosystem services, such as clean air, water filtration, and carbon sequestration, have traditionally been considered externalities and ignored in cost-benefit analyses. Properly valuing these services ensures they are considered alongside economic growth, leading to more holistic and sustainable decision-making.

Ignoring the value of natural capital can lead to resource overexploitation, environmental degradation, and biodiversity loss. For example, deforestation might bring short-term economic benefits but could result in long-term costs such as soil erosion and accelerated climate change. Natural capital valuation makes these hidden costs explicit, helping policymakers and investors assess the true risks associated with unsustainable activities.

This session will share lessons from pilot studies in 16 countries across Asia and the Pacific, Africa, and Latin America on developing natural capital approaches to inform policy and investment decisions for meeting development and conservation objectives. A cross-MDB team and Stanford University will also discuss how to scale up these approaches. The presentation of the pilot studies will focus on the analytical process since the theme is “Data & Analytics,” i.e., more technical than general content.