Understanding natural capital
Natural capital refers to the valuable resources and services provided by nature. Healthy natural assets provide benefits such as clean air and water, food production and climate control.
There are several natural capital terms that relate to your property and farm business. Understanding these terms can help you manage and realise returns from your natural capital.
Natural assets and ecosystem services
You will have a range of different natural assets on your property.
Different types of natural assets
- Fresh water (waterways, creeks, rivers, springs, farm dams)
- Fallen and standing timber
- Mountain ranges
- Grasslands
- Woodlands
- Atmosphere/air
- Soil
- Subsoil substances
- Groundwater
- Minerals
- Beaches and coastal dunes
- Ocean
- Saltmarsh
- Wetlands
- Riparian vegetation
- Endangered species
- Native vegetation/plants
- Native wildlife
- Ecological communities
- Geological formations (rocky outcrops, karst landforms, caves)
- Culturally significant area
- Aquatic wildlife
- Forests
These natural assets provide free services from nature, called 'ecosystem services’.
Different types of ecosystem services
- Noise and dust minimisation
- Provision of energy
- Production of forage and fodder for animals
- Provision of shelter for animals
- Water regulation and storage
- Regulation of waste
- Local temperature regulation and control
- Carbon sequestration/climate regulation
- Biomass production
- Science and education provision
- Pollination
- Conditions for producing food
- oil formation
- Nutrient recycling
- Water shedding or filtration
- Habitat provision
- Provision of recreation activities
- Regulation of erosion and sediment
- Provision of medicines
- Cultural significance
- Timber production
- Flood prevention and control
Environmental services
As a farm or property manager, when you take action to manage, restore or protect the environment you are providing environmental services to your community and beyond. This includes actions like planting trees, managing invasive species, optimising chemical application rates, managing native forests, improving soil health, or repairing damaged riverbanks.
Different types of environmental services
- Fencing to exclude stock and pests
- Controlling pests and weeds
- Re-establishing native grasses
- Renewable energy infrastructure
- Fencing to protect high value assets
- Establishing vegetation around dams
- Managing grazing pressure
- Creating science study zone
- Carbon sequestration zone
- Establishing biodiverse shelter belts
- Managing fertiliser
- Practicising water use efficiency
- Regenerating soils
- Stopping sedimentation in waterways
- Re-establishing wetlands, mangroves and saltmarsh
- Constructing in-stream habitat
- Controlling erosion
- Revegetating and protecting riparian zones
- Cultural (cool) burning
- Protecting critical habitat
- Managing native vegetation seed banks
- Protecting culturally significant assets
- Rehabilitating waterways
- Maintaining flood management structures
Your natural capital management practices can also deliver benefits for your farm business, including:
- improved productivity
- diversification and resilience
- increased social licence.
The information provided is of a general nature and does not take your specific needs or circumstances into consideration. Please ensure that you review your own situation, objectives and requirements and seek professional advice before making any business or financial decisions.