Unearthing Value: How nature can play a critical role in pro-growth agendas

Nature accounting: Getting it on the books

Used properly, nature accounting can result in smarter projects, resilient supply chains, reduced disaster losses, and pipelines of investable natural assets-turning ecosystems into wealth drivers. But frameworks like the UN's SEEA that already exist need more use cases to demonstrate its value informing investments.

In Canada, the Critical Minerals Strategy and major projects that fall within could be a litmus test for implementing SEEA in project assessments and plans to mobilize capital. However, inclusion of Indigenous lands, values, and knowledge in SEEA framework is critical in closing the gap between Free, Prior, and Informed Consent (FPIC) and nature accounting metrics. Indigenous rights and knowledge must be at the core of nature accounting-so economic growth builds natural capital wealth and respects those who steward it.

Embedding natural capital values in impact assessments and broader pro-growth agendas like the U.K.'s Plan for Change could ensure that new developments unlock investment for green infrastructure and proceed where water use demands can be met. Nature accounting in the Thames Valley, one of the U.K.'s most water-stressed regions, could transform how housing and infrastructure projects are assessed. Leveraging nature as an asset in development and land-use decision making can reframe local authorities and developers' approach in weighing the economic costs and trade-offs of water management and broaden the suite of options, including grey, green and hybrid options. Finally, consider the Chesapeake Bay watershed, covering six states along eastern shores of the U.S., which faces some of the highest nutrient pollution in the country from industry, agriculture and urban runoff, causing degraded water quality, habitat loss, and economic impacts on fisheries and recreation.³⁶ Integrating natural capital values into infrastructure and land-use planning would enable targeted investments in green infrastructure and ecosystem services. It also presents an opportunity for farmers in the region to replicate the approach taken by the farmers in the Lake Winnipeg Basin Project case study to drive investment in agricultural-based water stewardship.

Policy integration: Net-new is not necessary to move money and rules toward nature-positive growth

Integrating government funding with plans to build supply of carbon offset projects in compliance offset markets is one key area for policy integration to grow, while ensuring projects adhere to additionality principles. In Canada, offset protocols for forestry and agriculture are emerging on the Federal GHG Offset System, yet farmers, as demonstrated by the Prince Edward Island Federation of Agriculture's case study, are generally ill-equipped to meet data quality and record keeping requirements of carbon offset projects. Leveraging existing funding programs, like the nearly $500 million Agricultural Clean Technology program is an opportunity to address this challenge. Supporting farmers in navigating how their investments in hardware and software can help them collect the necessary data to access carbon incentives could help build the supply of nature-based offset projects on the Federal GHG Offset System and improve funding program outcomes.

The explicit inclusion and prioritization of nature-based sectors and green infrastructure projects in government-led growth funds is another launch pad for integrating nature into pro-growth agendas. The forthcoming United States Sovereign Wealth Fund, the nearly-$50 billion National Wealth Fund in the U.K., and the $15-billion Canada Growth Fund are places to start in prioritizing investable nature-based and natural capital wealth projects.

Finally, improving the community resilience and potentially reduce costs in the housing development boom is an imminent policy integration opportunity. The U.K. is driving action through the biodiversity net gain scheme-an opportunity to crowd in greater private capital. In Canada, there is an opportunity to use the National Adaptation Strategy to mainstream nature-based projects in municipal housing programs tied to federal funds including, the Canada Housing Infrastructure Fund (CHIF). The CHIF has committed to investing CAD$6 billion over 10 years in housing development water and wastewater management.

Embracing disruptive technology: Enable AI to streamline nature governance and build natural capital

Nature accounting and governance is deeply complex. There are numerous protocols, frameworks and standards for measuring, monitoring, accounting, reporting, and verifying natural assets and their ecosystem services. Since this governance network of standards and framework is critical to ensure rigor in nature accounting, there is a need to simplify it to ease adoption. Learning from countries like Estonia, a leader in implementing AI to transform public administration, is an opportunity for the nature and conservation sector to advance the implementation of nature standards and frameworks like SEEA.

Nature-based projects that assess outcomes and monitor progress can also leverage AI to automatically process satellite imagery, remote sensing, sensors, and public datasets to monitor ecosystems in near real time, reducing manual data collection costs and improving accuracy. Of course, the cost of powering AI can't be ignored. AI data centres are a growing competitor in the demand for land, water and energy. It is a strategic imperative, especially among countries with depleting natural resources like the U.K., to leverage natural capital in determining where it is possible to build a clean fleet of AI data centres. In addition to location, design features are critical in mitigate natural resource use, like rainwater harvesting or net-positive watering, which can return clean water back to neighbouring landscapes. To ease pressure on land, the use of heat offtake can also position AI data centres to have a dual purpose in, for example, greenhouse food production.

Pro-growth agendas need to do more than extract for wealth, they need to build natural assets that sustain wealth today and for the future. Nations that do so can shift control and value of natural wealth to those who steward it. Global finance is already moving, and investors are on the hunt for impactful natural capital projects that generate returns. Countries that account and build their natural capital wealth can be home to this investment. This opportunity requires a shift in government and business approaches, treating natural capital, not as a regulatory box to tick or a nice to have, but as foundational for growth - the wealth beneath wealth.