Toward a Business‐Oriented Concept of Natural Capital and Its Measurement in Organizations

Purpose – This paper aims to discuss natural capital by offering some viewpoints on the economic rationality facilitated by the concept. The paper highlights the likely performativity of the concept and, ultimately, how this may impact us. Design/methodology/approach – This paper draws on existing literature to develop its arguments. Findings – The concept of natural capital may be necessary and accepted, but it is not benign and it facilitates the expansion of economic rationality to new areas. The paper uses some examples to draw out some potential implications of economic rationality that the concept of natural capital may facilitate that are morally dubious. Research limitations/implications – This paper is a cautionary note to those who might use the concept of natural capital and offers considerations through the use of examples. Practical implications – The practical implications of this paper are that users of capitals or natural capital frameworks should consider all the potential outcomes of app...

This article is based on the existing literature on the concept, categories, and natural variables of capital and aims to discuss natural capital, offering some points of view on the emerging rationality of specialized literature. In a preliminary stage, a systematic analysis and cumulative review were used to identify and select the variables to measure natural capital and, in this stage, 1856 articles were selected. The surveys were captured and the variables on the environmental resources used in the research were analyzed with the result of the reading concentrated on the variables. A content analysis was carried out to check the reading, consisted of (i) pre-analysis, (ii) analytical description and (iii) inferential interpretation, verification of the frequency of words per article. The concept of natural capital is necessary and acceptable, but it is not easy to understand it categorically or measure its value. It is an interdisciplinary issue and some schools of thinkers could be noticed. The messages about ecological characteristics are limited to the field of study mainly of qualitative water analysis. It was also possible to identify contents that conceptualize the Natural Capital based on sources of energy and agriculture. There is a search for indicators as ways to measure the environment that give rise the variables to Natural Capital to meet mainly the needs of the economy. The article highlights the probable performativity of the concept and, ultimately, how it can impact us and incorporates the discussion of Natural Capital in the accounting headings. This article is a cautionary note for those who use the concept of natural capital and offers considerations using examples in the literature. Based on the existing literature, the originality lies in the discussion that natural capital is not a neutral term and its framing is likely to have broader implications.

We are currently observing significant transformations that affect the quality of human life. Careless use of the environment significantly limits its resources and leads to its destruction. Therefore, responsible management of the natural environment and natural capital is crucial for us to benefit from it in the future. The natural environment, natural processes related to all environmental components, largely determine wild welfare. Ecological economics gives tremendous importance to biological processes (capital) that create everything on which people are dependent. Natural capital is closely related to the state of ecosystems. Natural capital is a term used for the entity of the living and non-living components of ecosystems. It “includes all forms of ecosystems and natural resources that create human welfare but are not its work”. The relationship between ecosystems and processes generates goods and services for people. Natural capital consists mainly of ecosystems, primary producers, species composition, the related above and below-ground organisms, the processes, and resulting ecosystem functioning, which are the fundamentals for providing ecological services. Ecosystem services maintain people’s lives and the balance of ecosystems. Undoubtedly, natural capital stocks and services of biological systems are of crucial importance for the functioning of life on the Earth. Moreover, they contribute to the welfare of people, forming “part of the total economic value of the planet”. The issue dealt with in the paper is, among others, the concept of natural capital in post-industrial landscapes. Currently, this issue assumes significant importance due to the environmental crisis and depletion of natural resources. Furthermore, changes in the economy and technology mean that natural capital is currently undergoing further significant transformations. In these circumstances, a new approach to environmental management, including the concept of natural capital, is becoming an urgent need.

The natural environment is now commonly viewed as a form of capital asset, or natural capital. Also included are ecosystems that provide important goods and services to the economy. Managing natural capital has consequences for sustainable development. However, there are contrasting weak versus strong sustainability views, which in turn have implications for ‘green’ accounting. Natural resource-based sovereign wealth funds have emerged as key financial instruments for compensating resource depreciation with greater economy-wide investments. Recent scientific evidence recommends demarcating ‘safe operating spaces’ to limit exploitation of critical global biophysical subsystems or processes. These challenges suggest that the concept of natural capital is pivotal to sound policy.

The actual problem of interrelations between culture and economy demands new approaches and reconsideration because of the ongoing development of the market economy and the necessity to provide equal opportunities for development of multiculturalism, self expression, preservation of biocultural diversity for the purpose of sustainable development of mankind. As there is no other equivalent of evaluation in society but money, or economy in a broader sense, it is better to use the well-known economical terminology to combine the conceptions of culture and economy, but it is necessary to find new approaches, sections, and bases for that. Development of the conception of cultural capital is one of the approaches. Within the proposed discourse, there seems to be a distinct cognitive potential in the concept of natural capital, which affords ground for searching the analogies between natural and cultural resources, between natural and cultural capital. The analogies will provide the opportunity to identify a certain “similarity” and interaction of the two types of capital during the whole period of anthropogenesis. The idea of cultural capital can be expanded by the conception of sustainability: since the cultural capital exists as a source of cultural goods and services, it can become an object of management according to the social needs of individuals and society. The article provides the list of principles needed to control the sustainable development of the cultural capital. Orientation of the cultural capital towards the development of humanity and human capital unites together the cultural capital, natural capital, and human capital, and this unity is a reflection of the socioecosystematic approach to the development of mankind. Reduction of all the cultural activities simply to the service sector impoverishes the conception of the phenomenon of culture and the contribution of culture to the human and spiritual development, restricts the role of culture in the spiritual development of society, which leads to the impossibility of its further innovative and sustainable development.

This paper views the concept of natural capital from an economist’s perspective. It begins by drawing on historical debates in economics on the nature of capital. These serve to identify central issues to do with the relationship between theory, empirics and method in the way in which the concept of capital is deployed in economic discourse. It is suggested that these have resonance for current discussions of the concept of natural capital. Against this background, the paper then discusses the way in which natural capital figures in the analysis of sustainability, and pinpoints various incoherencies. Finally, it draws on recent analyses of technical innovation as a possible solution to the problem of sustainability. It is suggested that there may be a conflict between narrow path‐dependent solutions to the alleged problem, and more open learning‐based approaches. The latter are exemplified by building on and reinterpreting the environmental economist’s concept of a quasi‐option.

This dissertation undertakes a philosophical analysis of and argues that this concept has prompted economists to view nature in a radically novel manner. Formerly, economists referred to nature and natural products as a collection of inert materials to be drawn upon in isolation and then rearranged by human agents to produce commodities. More recently, however, nature is depicted as a collection of active, modifiable, and economically valuable processes, often construed as ecosystems that produce marketable and services gratis. Nature consists of various unproduced mechanisms or machines that are first discovered and then channeled so as to serve human ends. In short, nature as an ideal is a kind of garden that is characterized by natural objects purposefully arranged by intentional human agents.The first two chapters of this dissertation lays out working definitions of the key terms, such as capital and nature, and then argues that the spatio-temporal particulars denoted by the concept of natural capital, such as ecosystems, are objects (2) capable of producing, (3) depletable, (4) beneficial, (5) original, and (6) self-generative. Among these six characteristics, it is argued that the first four are shared with manufactured capital, while the last two-original and self-generative- drive a wedge between natural and manufactured capital.Chapter three traces the historical roots of nature as a producer in the works of the Swedish botanist Carl Linnaeus' (1749) Oeconomia naturae and the physiocrats of France during the mid-18th century. This chapter argues that if natural capital is taken to denote nature as an unassisted producer of readily consumable and services, then it can hardly be considered a novel concept. There is a nascent category of the concept of natural capital to be unearthed in the writings of classical political economists, such as Adam Smith, John Stuart Mill, and Karl Marx. When such economic theorists referred to the spontaneous productions of the Earth and nature's products, they had a distinctive class of production in mind, one that denotes nature's independently generated products.Chapter four, entitled, Critical Natural Capital and Sustainable Development, tackles a version of the most vexing question concerning natural capital: to what extent can manufactured capital serve as a substitute for natural capital? Economists influenced by the life sciences have long argued that there is a subset of natural capital, natural capital, for which there are no substitutes. This special category of natural capital is meant to denote the ecological conditions essential to the continued existence of economic agents and therefore, sustainable development. However, the problem is that no one has explained what these conditions might be and why they are essential for this purpose. To resolve this issue, this chapter introduces a new theory of what are termed basic ecological goods (BEGs). It is shown that BEGs are distinct from ordinary in consumer choice theory since the former are objective ecological conditions that must be met for the continued existence of economic agents. BEGs are required for the continued existence of a given agent because they possess objective causal properties essential for this purpose. The upshot of this theory is that the ecological conditions required for human economic activity and, therefore, sustainable development, are no longer shrouded in mystery as they were under the canopy of critical natural capital. …

Sustaining soil productivity in response to climate change is critical for two reasons: feeding the world under straitened circumstances, plus adapting to and mitigating climate change itself. The supporting, provisioning and regulating ecosystem services provided by soil are critical for food provision and for meeting the challenges of climate change. We outline how an ecosystem services approach that recognises and values the soil‟s natural capital stocks of carbon, air, water, and water, might offer a means to ensure maximised use of natural capital and minimised use of added capital resources. We present three examples of securing sustainable returns on investment into the soil‟s natural capital: we link soil processes controlled by carbon to soil ecosystem services; we value supporting and regulating soil services in the provision of terroir value for wine; and we use a valuation of the soil‟s natural capital to allocate a nutrient-loss right for policy to limit non-point source pollution by nutrients from farms. Firstly, we found for two similar soils that had undergone 12 years of apple growing using different carbon-management practices, phenoforms had developed with different levels of soil carbon. Thus the natural capital value of the soil with the higher carbon content we found to be greater as a result of its enhanced supporting and regulating ecosystem services. Conversely for vineyard soil we found that natural capital value declined with increasing soil carbon throughout the profile, for the terroir lessened as a result of excessive vegetative vigour resulting from greater nutrient provision and water storage. However, if a mulch just raised the carbon content of only the surface soil, then the natural capital value of the soil would be enhanced through better supporting, regulating and provisioning services. Finally we outline how soil scientists can become involved with policy analysts to develop a nutrient management policy that is based on the concept of natural capital. This policy does not focus on capping inputs, but rather it seeks to engage with land-users to maximise their return on investment into their natural capital assets and to encourage their sustainable management of the landscape‟s biophysical resources without compromising the ecosystem services of receiving environments.

ABSTRACTWorking with the concept of natural capital has changed the way we do environmental economics in practice. This article sets the scene by defining natural capital, natural capital approach and natural capital accounting. The reasons why businesses prepare natural capital accounts are summarised. The article concludes with thoughts on what the future holds for the natural capital approach.

At the time of its introduction in the end of the 1980s, the concept of natural capital represented new, more ecologically aware thinking in economics. As a symbol of novel thinking, the metaphor of natural capital stimulated a debate between different disciplinary traditions on the definitions of the concept and research priorities and methods. The concept became a means to control the discourse of sustainable development. In this paper, I focus on the power/ knowledge implications of the use of the concept, and I follow the career of the concept of natural capital in ecological economic publications between the years 1988 and 2000. The main interests are(1) in the use of the concept to affect the rules according to which claims concerning sustainable development can be made and (2) in the constitution of objects of environmental knowledge.

Purpose This research seeks to systematically review studies on risk management (RM) in the construction industry, tracing its evolution from traditional approaches focused on risk identification, assessment, and mitigation to modern approaches that prioritize sustainability, resilience, and adaptability. It aims to develop a clear definition of sustainable risk management (SRM) and propose a framework for its implementation to ensure cost-efficient, resilient, and flexible operations. Design/methodology/approach A systematic literature review, guided by the PRISMA framework, analyzed 79 peer-reviewed articles (2014–2024) from Scopus, IEEE Xplore, Wiley, and other databases. Thematic grouping was used to categorize key SRM components, identifying emerging trends, gaps, and challenges in its adoption. Findings The study identifies key SRM pillars and attributes, demonstrating how SRM enhances the sustainability and resilience of RM practices. The proposed framework provides a structured approach to integrating SRM principles into construction operations, addressing implementation barriers such as regulatory misalignment, industry resistance, and technological integration. The findings also highlight the broader impact of SRM on shaping proactive and future-proof RM strategies. Practical implications Construction firms and policymakers can benefit from the findings of this study by understanding the key pillars, attributes, and challenges of SRM. The proposed framework provides practical guidance for firms to evaluate and improve their current RM practices, particularly in addressing complex industry challenges and enhancing resilience and sustainability. Policymakers can use these insights to align regulations with SRM principles, supporting RM processes that are both effective and future-proof. Additionally, the study equips industry professionals with tools to enhance adaptability and long-term RM effectiveness. Originality/value As one of the first comprehensive reviews of SRM in the construction industry, this study consolidates key insights and provides a structured framework for both researchers and practitioners. It advances discussions on integrating sustainability within RM and highlights the need for empirical validation, particularly in assessing the role of digital transformation in SRM. By bridging theoretical gaps and practical applications, this research establishes a foundation for future studies on sustainable and technology-driven RM strategies.

Environmental issues become the current urgent problems to be solved. This paper summarizes the concept and theoretical development of the natural capital, and advocacy to establish the concepts which are that facing up to natural capital, respecting the natural capital, protection of natural capital. On this basis, it is proposed that the environmental capacity is considered as an essential production factor for enterprise, and environmental production factor theory is deemed as the point to achieve green accounting.

Adam Smith and the concept of natural capital

Sustainability, in the discourse of neoclassical economics,1 is thought of as maintaining a constant or increasing level of utility (consumption in the standard formulation) which depends, in turn, on maintaining the stock of capital assets generating that utility (Hartwick, 1977; Solow, 1974). In this way capital has been elevated to a central position in neoclassical discussions of sustainability. Ecological economists2 have refined and extended the discussion of sustainability by introducing and popularizing the concept of natural capital. Focusing on natural capital as distinct from man-made capital has brought the biophysical context of economic activity front and center (Krall and Klitgaard, 2011). As Costanza (1994, 394) put it over 20 years ago: ‘…we are now entering an era, thanks to the enormous increase of the human scale, in which natural capital is the limiting factor. Human activities can significantly reduce the capacity of natural capital to yield the flow of ecosystem goods and services upon which the very productivity of human-made capital depends’. In the ensuing years a considerable effort has been invested by ecological economists in sorting through the best way to account for natural capital. It is important to clarify our understanding and use of natural capital, especially given its centrality in the discourse and methodology of ecological economics.

At the time of its introduction at the end of the 1980s, the concept of natural capital represented new, more ecologically aware thinking in economics. As a symbol of novel thinking, the metaphor of natural capital stimulated a debate between different disciplinary traditions on the definitions of the concept and research priorities and methods. The concept became a means to control the discourse of sustainable development. In this paper, I focus on the power/knowledge implications of the use of the concept, and I follow the career of the concept of natural capital in ecological economic publications between the years 1988 and 2000. The main interests are: (1) in the use of the concept to affect the rules according to which claims concerning sustainable development can be made and (2) in the constitution of objects of environmental knowledge.