Natural Capital

The world's stocks of natural assets—including geology, soil, air, water, and all living organisms—which combine to yield a continuous flow of valuable ecosystem services to society.

Natural capital represents the world's stock of natural assets—including forest soils, water systems, and biodiversity—that combine to yield a continuous flow of vital ecosystem services to society.

In forestry, this framework expands traditional economic metrics beyond harvestable timber volume, recognising a woodland as a multi-functional asset base. The forest's physical and biological components comprise its 'stock', while the 'flow; refers to the invaluable services generated. These include provisioning (timber and non-timber forest products), regulating (carbon sequestration and flood mitigation), and cultural benefits (recreation and landscape heritage).

Managing forests through this lens requires accounting for asset depreciation. Practices such as intensive clear-felling or severe soil compaction degrade the underlying capital stock, diminishing its capacity to filter water or store carbon for future generations. Conversely, silvicultural systems like continuous cover forestry and agroforestry actively invest in and enhance natural capital, securing long-term ecological resilience and economic stability within modern green accounting frameworks.