In 2023, G20 India’s T20 engagement group recommended an enabling ecosystem for wider adoption of ‘natural capital valuation’ to mobilise investments while delivering sustainable outcomes for people and nature. Subsequently, the T20 engagement group of G20 Brazil (2024) asserted that a holistic and just (net-zero) transition cannot be achieved without embedding human capital considerations, especially inclusivity and fairness (leading to just transition).
Based on evidence collected from a diverse set of countries, this policy brief will present options for the G20 to build trust in valuation and drive investments and innovations that advance the biodiversity–climate–development nexus while keeping an eye on driving equality. It will demonstrate how investors, financial institutions and governments could collaborate to mainstream valuation of natural, social, human and produced capital in business/economic decision-making. For example, the Dutch Central Bank found that Dutch financial institutions worldwide have EUR 510 billion in exposure to companies with high or very high dependencies on one or more ecosystem services.
Biodiversity loss, extreme weather events, natural resource shortage and societal polarisation have been predicted as ‘top risks in the future’ by successive WEF Global Risk Reports, including the 2025 edition. Businesses leaders are being forced to consider various options for future-proofing operations, including along their supply chains.
Businesses are realising that a strategy designed to achieve economic growth without compromising on climate and biodiversity impacts, will attract the attention of buyers, investors, financiers and politicians. The ‘capitals valuation’ approach involves mapping businesses’ dependencies and impacts on natural, human, social and produced capital and building trust in how these impacts and dependencies are valued. This approach ensures fit-for-purpose information for decision-making, that is accepted, legitimised, quantified, objectified and codified, to inform pathways for transformation.
Investors, financial Institutions, regulators and governments across and beyond the G20 will need to collaborate to build trust in capitals valuation for decision-making, as observed by two subsequent G20 T20s. This policy brief will encourage business leaders to undertake comprehensive capitals valuation to inform business decisions, to support sustainable business transformation. This will also help businesses demonstrate their contribution towards implementing the CBD Global Biodiversity Framework.
