Firms realise accounting of natural capital 'is in their interest'

Countries are taking mapping of natural resources very seriously: President Tharman

- Shabana Begum

The idea of putting an actual value to natural resources like water in economic terms is gaining traction with countries, but large corporations have also realised that natural capital accounting is “in their own interest”, said President Tharman Shanmugaratnam.

“Water doesn’t come from the tap. It comes from natural ecosystems... We’ve got to preserve the ecosystems, be they forests or wetlands, or ensuring we are not over-extracting from rivers or groundwater,” he said in a dialogue session on June 18, when the topic turned to how to price water correctly.

Incentivising the conservation of water and the ecosystems that produce water was a key message at the dialogue, which was held at the Lee Kuan Yew Water Prize 2024 award ceremony at The Fullerton Bay Hotel.

Natural capital accounting shows how natural resources contribute to the economy and how the economy affects natural resources.

It can provide a broader picture of development and economic progress than standard measures such as gross domestic product.

“Countries are now taking very seriously the mapping of their natural resources, their natural capital,” said Mr Tharman, who is also co-chair of the Global Commission on the Economics of Water.