Driven by aggressive provincial housing mandates, multibillion-dollar federal investments in clean energy and electric vehicle supply chains, and the push to unlock critical minerals in regions like Ontario’s Ring of Fire, we are accelerating infrastructure and resource development at a pace not seen in decades. At the same time, Canada has committed not only to protect nature, but to halt and reverse biodiversity loss by 2030 and put nature on a path to full recovery by 2050.

These goals are typically framed as being in conflict. But the real problem is not the tension between development and nature. It is that we have never built a system that allows them to work together.

Canada’s growth agenda is not optional. Housing shortages, energy systems and major infrastructure projects must move forward quickly. The question is not whether we develop. It is whether we continue to do so in ways that degrade the natural systems our economy depends on, or whether we build a system that allows development and nature to advance together.

The missing piece isn’t capital – it’s architecture

Over the past decade, a familiar argument has taken hold: nature is valuable, essential to the economy and increasingly at risk. The conclusion seems obvious. Capital should flow toward protecting and restoring it.

But it hasn’t, at least not at the scale required.

The reason is not a lack of capital, policy intent or even progress on measurement. It is a lack of architecture. Nature largely remains outside the systems that drive investment decisions. It is measured inconsistently, accounted for incompletely and governed through fragmented, project-by-project processes. The result is predictable: nature remains economically invisible and therefore largely non-investable.

That is now beginning to change.

The economic stakes are enormous. Globally, an estimated $700 billion per year is required by 2030 to halt and reverse biodiversity loss. At the same time, Canadian pension funds and institutional investors manage hundreds of billions in capital seeking long-term, stable returns.

The issue is not capital. It is the absence of structures that allow it to flow into nature.

A convergence of conditions

Canada’s emerging nature strategy signals a structural shift. It positions nature not just as something to protect, but as a foundation of long-term economic prosperity. More importantly, it introduces tools that could fundamentally reshape how development and conservation interact.

One of the most significant is the use of regional assessments under the Impact Assessment Act. This tool is designed to evaluate cumulative environmental, social and economic effects across entire regions, including past, present and future activities.

This is a quiet but profound shift. For decades, environmental decision-making in Canada has been reactive and project-based. Regional assessments are emerging as a mechanism to shift toward proactive, forward-looking land-use planning that can define ecological limits in advance.

They are more than a planning tool. They are the foundation of a functioning nature market.

By defining cumulative impacts, ecological thresholds and development scenarios at a regional scale, regional assessments create the clarity and predictability that capital requires. Without this, nature remains too uncertain to price, too fragmented to manage and, ultimately, too risky to invest in.

If Canada is serious about becoming a nature-positive economy, regional assessments cannot remain occasional exercises. They must be institutionalized, scaled and embedded into how development decisions are made across the country – and quickly.

At the same time, other foundational elements are falling into place. Advances in ecosystem measurement and accounting frameworks are improving how nature is understood and valued. Financial frameworks are beginning to integrate nature-related risks into decision-making. Artificial intelligence, satellite monitoring and environmental data are making it possible to measure and verify ecological outcomes at scale.

Crucially, Indigenous stewardship is emerging as a central pillar of both conservation and economic participation. Large-scale Indigenous Protected and Conserved Areas, such as the Seal River Watershed, demonstrate how Indigenous leadership can secure vast carbon sinks and protect biodiversity at scale. Mature initiatives like British Columbia’s Great Bear Forest Carbon Project show that conservation can also be highly investable, generating long-term revenue streams through verified ecosystem services.

Paired with financial tools such as Indigenous loan-guarantee programs, Indigenous communities are uniquely positioned to become primary suppliers and equity partners in nature-based solutions.

The constraint is no longer the absence of data alone. While important gaps remain, advances in environmental measurement, accounting and monitoring are rapidly reducing this barrier.

Individually, these developments are important. Together, they represent something more: Canada is no longer missing the pieces. It is missing the architecture.

From protection to recovery – and the case for net gain

This shift is reinforced at the global level. Under the Kunming–Montreal Global Biodiversity Framework, countries have committed not only to protect nature, but to halt and reverse biodiversity loss by 2030 and restore ecosystem integrity by 2050.

That ambition goes beyond conservation. It implies a transition from minimizing harm to actively restoring nature – from “no net loss” to net gain. Over time, development must not only reduce its impact, but contribute to rebuilding natural systems.

From limits to markets

If regional planning defines ecological limits, it also creates something markets require: certainty.

That certainty can be translated into a simple but powerful mechanism.

When major projects affect ecosystems, they are generally expected to follow the mitigation hierarchy: avoid, minimize, restore and only then offset residual impacts. In practice, however, its application remains uneven and fragmented, limiting its effectiveness as a foundation for consistent, investable outcomes.

What if those residual impacts were consistently quantified and priced? What if developers were required to deliver not just mitigation, but net-positive outcomes?

This is not theoretical. In the United Kingdom, “biodiversity net gain” rules have already created a functioning market that channels private capital into restoration and conservation.

Canada is now in a position to build its own version – potentially more ambitious and more integrated.

A Canadian nature-positive market

At its core, the system would be straightforward:

• Regional plans define ecological limits and priorities. 
• Developers are required to address impacts, with residual effects converted into measurable obligations. 
• Markets allow those obligations to be met through investment in restoration and ecosystem services. 
• Indigenous communities, conservation authorities and landowners become suppliers of nature-based solutions. 

Over time, this could expand beyond biodiversity to include carbon, water, flood mitigation and habitat, creating multiple, stackable revenue streams.

With the right structure, these projects begin to resemble infrastructure investments, with long-term, stable returns tied to measurable ecological outcomes.

Sticks, carrots – and a familiar playbook

For this system to scale, it will require both regulation and incentives – and, crucially, alignment between federal environmental ambition and provincial jurisdiction over natural resources.

In practice, this means a combination of “sticks” and “carrots”: clear ecological limits, mandatory net-gain requirements and enforceable obligations, alongside tax incentives, blended finance and public guarantees that reduce risk and attract capital.

Canada has used this model before. Flow-through shares and public–private structures helped build the oil, gas and mining sectors. The same logic can now be applied to nature.

A nation-building opportunity

This is not environmental policy. It is economic strategy.

Canada has a once-in-a-generation opportunity to move from protecting nature to financing it, embedding natural assets into the same systems that fund roads, energy and housing.

The choice is no longer between development and conservation. It is between continuing with fragmented approaches that fail to scale or building a system where growth and nature are structurally aligned.

The pieces are now on the table. What remains is the architecture.

Peter van Dijk is a former global finance executive, adjunct professor at Brock University, and incoming PhD researcher at the University of Ottawa focusing on nature finance and the economic architecture for a nature-positive future.

The post How to put nature at the centre of investment decisions appeared first on Corporate Knights.

Natural assets (such as rivers, wetlands and forests) are neither traded nor routinely valued, yet they provide critical services like helping manage worsening floods, droughts and heat waves, as well as storing carbon to slow climate change. These services are financially valuable. For example, an Institute for Sustainable Finance report estimates that Canadian wetlands alone provide services worth approximately $225 billion annually, equivalent to around 8% of Canada’s gross domestic product.

However, over-consumption of open access, seemingly “free” services from natural assets can lead to continued and undocumented degradation of such assets, as comprehensively discussed by the Dasgupta Review in the U.K. and encapsulated in concepts like the “tragedy of the commons” and negative externalities.

Recognition of natural assets in public-sector financial statements is long overdue. A 2021 Intelligence Memo explored the urgent need to report on natural assets. That same year, senior executives and leaders from nearly 70 organizations signed a joint letter urging Canada’s Public Sector Accounting Board (PSAB) to work toward “getting nature on the balance sheet” of public sector entities. Today, the path to formally recognizing natural assets has become clearer.

This involves adopting internationally aligned standards to account explicitly for the value of natural assets. The International Public Sector Accounting Standards Board (IPSASB) has made significant progress on its multi-year natural resources project and is expected to publish a draft international standard this fall to propose criteria for recognizing “natural resource assets” in financial statements and requirements for note disclosures.

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Additionally, IPSASB has updated its international standard for the measurement of the financial value of assets, introducing “current operational value” as a method for quantifying the “service potential” of natural assets. This method can include the ecosystem services provided by natural assets.

In Canada, where 80% of the land is publicly owned, PSAB has indicated its intent to follow IPSASB’s guidance, making the adoption of a similar standard for Canada likely. This would allow the inclusion of natural assets that meet certain criteria in public-sector financial statements, rectifying their current exclusion.

Momentum is building in Canada ahead of official standards to provide the data necessary to more effectively measure the financial value of natural assets. Nationally, the Census of Environment – led by Statistics Canada – is actively compiling Canada’s natural capital accounts, with geospatial datasets already available for urban greenness and salt-marsh habitat. In 2023, specifications for natural asset inventories were published as a national standard of Canada.

At the local level, more than 150 local governments are already inventorying, assessing, valuing and managing their natural assets. Cities like Calgary and Mississauga and are making quantitative, albeit unaudited, disclosures related to natural assets in their financial statements. Yet these encouraging local-government approaches lack uniformity and encompass less than 5% of the total number of Canadian municipalities. National standards are essential to achieve consistency and broad-based adoption in the financial reporting of natural assets.

Important policy considerations will arise when (not if) Canada adopts public-sector accounting standards for natural assets that ensure transparent, consistent and routine reporting on their value.

Public sector recognition of natural assets will inevitably affect the private sector, particularly public–private interactions, such as land development, which often degrade and diminish the financial value of these assets. The valuation of natural assets may also affect how private sector entities consider managing “nature-related transition risks” – actions to protect or restore negative environmental impacts.

The work of the International Sustainability Standards Board, building on the Taskforce on Nature-Related Financial Disclosures, will be pivotal in setting sustainability standards that address nature-related risks from a financial materiality perspective. Accordingly, this work will need to consider the value of natural assets as they are formally recognized.

Also, it is essential to shape accounting policy for numerous lands with treaty rights through ongoing engagement with and learning from Indigenous Peoples.

The IPSASB is to be congratulated on its leadership in this crucial domain of valuing natural assets and ecosystem services. We eagerly await updates to Canada’s public-sector accounting standards.

Joanna Eyquem is managing director of climate-resilient infrastructure at the Intact Centre on Climate Adaptation. Peter van Dijk and James K. Stewart are senior fellows at the C.D. Howe Institute.

This piece originally appeared as a C.D. Howe Institute Intelligence Memo. It has been edited to conform with Corporate Knights style.

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