How is "natural capital" defined?

The term "natural capital" is defined as the world's stocks of natural assets, which include geology, soil, air, water, and all living things. Essentially, it refers to valuable elements of the natural environment that provide benefits to humanity, such as forests, rivers, and minerals. These elements are crucial for supporting life and economic activities and are recognized for their ecological and economic importance.

Focusing on the definition in the context of sustainability and environmental management, natural capital is integral to understanding how natural assets contribute to human well-being and the economy. By recognizing forests and rivers, for instance, as natural capital, entities can assess their value in terms of ecosystem services provided, such as clean air, water purification, and biodiversity, which all contribute to a sustainable future.

In contrast to other choices, financial resources and assets acquired by an entity, stocks and bonds in a financial market, or even the cost of investments in renewable energy do not encompass the broader and more intrinsic value associated with the natural environment. Natural capital emphasizes the fundamental elements of nature itself rather than purely financial or investment constructs, making it distinct and vital in discussions about sustainable development and environmental stewardship.