Make Nature Count 2.0: Incorporating the value of nature in impact assessments of financial investments

This Make Nature Count 2.0 report marks the latest step in the joint mission of ASN bank

and the Foundation for Sustainable Development (FSD) to integrate ecosystem service

valuation into financial decision-making. ASN Bank’s long-term goal to achieve a net positive

effect on biodiversity through its loans and investments by 2030, is devoted to preventing

further biodiversity loss and actively fostering a net increase.

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Building on the insights of last year’s “Make Nature Count” report, this document delves

deeper into the practical application of monetary valuation of ecosystem services. Our aim is

to explore where this methodology fits within the evolving frameworks and regulations

established over the past year. We investigate how it can be integrated into impact assessments,

thereby offering crucial insights on how nature can be considered in decision-making.

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The specific objectives of this project were:

1. Measure the impact of land cover changes on ecosystem services and their monetary value by applying economic data from the Ecosystem Services Valuation Database (ESVD) and other sources.

2. Understand how knowledge on ecosystem services and economic valuation can be integrated in investment policies of ASN Bank and ASN Impact Investors.

3. Support efforts of the ASN Bank as a driver of change in the financial sector and society, by fuelling discussions on ways to make Nature truly Count through innovative changes needed to structurally integrate the value of nature in financial decision-making and our economy

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To attain these objectives, we evaluated the impact of two ongoing investment projects from the ASN Biodiversity Fund. The first project involves a farm in Spain transitioning from conventional to organic agriculture, while the second centres on a reforestation initiative in the Southern Amazon of Brazil. By applying the concept of monetary valuation of ecosystem services to investments, this report unveils the transformative potential of ecosystem services in bridging the divide between profit and principles. By expressing the value of these services in a universal, monetary language, we gain the ability to estimate the scale and direction of investment impacts on both nature and society. These insights will, in turn, contribute to more informed and sustainable decision making.

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In this Make Nature Count 2.0 report, we also make a clear case for the need for balancing the provisioning of different ecosystem services within an ecosystem. Something to take into account when hard choices are required in trade-offs to secure the production of essential services like food and water. However, our case study vividly underscores that an exclusive focus on provisioning services carries a considerable risk of devaluing the land to an unsustainable point. This insight resonates with the growing call for a just transition.

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In this report, we offer key conclusions that emphasize the urgency of integrating ecosystem service valuation into financial decision-making.

Our journey yields two primary insights, with two specific conclusions and three key recommendations: Redefining Economic Value:

Making the Business Case for Nature

1. Ecosystem services valuation provides a clear language for due diligence, offering a path to enhanced stakeholder engagement and new investment opportunities.

2. Ecosystem services valuation is key to determine most effective mitigation strategies.

The Sustainable Investment Case: Three Key Recommendations

It is imperative to:

1. Recognize the value of regulating ecosystem services;

2. Align time horizons with nature’s processes;

3. Re-evaluate discount rates based on land use

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