A new international accounting standard is giving governments a clearer path to recognize certain natural resources as public assets, as ministries of finance increasingly bring nature into decisions about national wealth, budgets and investment.
For decades, governments have accounted for roads, buildings, financial holdings and public debt while many forests, wetlands, watersheds and other ecosystems underpinning their economies remained largely outside formal public-sector financial statements.
That is beginning to change.
In January, the International Public Sector Accounting Standards Board issued IPSAS 51, Tangible Natural Resources Held for Conservation, creating accounting guidance for natural resources with physical substance, such as land, trees and water, held primarily for conservation. The standard takes effect for annual reporting periods beginning January 1, 2028, with earlier adoption permitted.
IPSAS 51 does not put the full economic value of biodiversity or ecosystem services onto sovereign balance sheets. But its arrival comes amid a broader shift: nature is moving toward the center of economic and financial management.
From Environmental Policy to Economic Policy
The intellectual case has been building for years.
Sir Partha Dasgupta’s landmark review for the UK Treasury argued that prosperity should be assessed through a broader conception of wealth encompassing produced, human and natural capital. GDP can rise even as the natural assets supporting future prosperity deteriorate.
That logic is increasingly entering ministries of finance.
The World Bank’s 2026 Global Policy Forum on Natural Capital focused on bringing natural-capital information into macroeconomic policy, fiscal frameworks and public-investment decisions. Professor Nicola Ranger of the London School of Economics has described the issue as “macro-critical nature,” reflecting the growing recognition that ecosystem degradation can affect economic and financial stability.
The IMF has similarly found that nature loss can create material risks for economies and financial systems.
The implication is significant: nature is increasingly being treated not only as something governments finance, but as something whose deterioration can weaken the economy itself.
Finance Ministries Are Moving From Measurement to Decisions
Several governments are already putting that thinking into practice.
Kenya’s National Treasury, working with the World Bank, has incorporated climate and natural-capital channels into macro-fiscal modeling used to inform budget policy.
In Chile, the Ministry of Finance participates in the country’s Natural Capital Committee, helping bring natural-capital information into public-policy decisions.
Lao PDR has established a Climate and Sustainable Finance Hub within its Ministry of Finance, while the Cook Islands and Liberia are bringing finance ministries directly into biodiversity-finance planning.
These initiatives differ in scope, but their institutional location matters.
Nature finance is increasingly becoming a finance-ministry issue rather than remaining principally the domain of environment ministries.
What IPSAS 51 Actually Changes
IPSAS 51 adds a new accounting layer to that transition.
The standard is deliberately narrow. It applies to naturally occurring tangible resources held primarily for conservation, including assets such as land, trees and water.
For qualifying assets acquired through non-exchange transactions, IPSAS 51 uses current operational value, focusing on the value of the resource’s service potential in its existing use. Assets acquired through exchange transactions are initially measured at cost.
But its limits are equally important. Resources held primarily for other purposes can fall under different public-sector accounting standards, while unextracted mineral and petroleum deposits are generally outside IPSAS 51.
So while “nature on the balance sheet” captures the direction of travel, three concepts should not be confused.
Natural-capital accounting brings environmental assets into national statistical accounts.
IPSAS 51 provides financial-reporting treatment for certain tangible natural resources held for conservation.
Broader sovereign natural-asset valuation, including ecosystem services and biodiversity value, remains an emerging financial frontier.
What IPSAS 51 Means for Public Financial Management
The implications could extend well beyond accounting departments.
A June analysis published on the IMF’s Public Financial Management Blog argues that IPSAS 51 addresses a longstanding reporting gap and could change how governments conceptualize and manage public wealth.
Implementation, however, will be difficult.
Governments will need to determine where assets begin and end within complex ecosystems, establish whether conservation is truly their primary purpose and develop workable valuation methods.
That will require closer collaboration among finance ministries, environmental agencies, statisticians, auditors and scientists, alongside stronger data systems and institutional capacity.
IPSAS 51 is therefore less an endpoint than the beginning of a new accounting infrastructure.
The Next Frontier: Sovereign Natural Assets
The larger question is where that infrastructure could lead.
Financial economist Dr. Ralph Chami has been among the prominent advocates of mechanisms through which the economic value generated by living ecosystems can gain greater recognition within sovereign financial architecture.
“For too long, sovereign balance sheets have recorded what governments owe while overlooking much of the living wealth they own. Recognizing living nature as an asset changes the question from ‘What does conservation cost?’ to ‘What value does this asset create, what risks does it reduce, and how do we manage it for future generations?’”
The premise is compelling: governments can hold enormously valuable forests, reefs, mangroves and other ecosystems while receiving little financial recognition for keeping them intact.
If credible valuation, legal rights and revenue mechanisms can be established, proponents argue, those assets could help mobilize conservation finance and potentially reshape how investors understand sovereign wealth.
That remains ahead of current international accounting practice.
IPSAS 51 does not monetize ecosystem services or automatically improve a country’s creditworthiness. But it may help normalize the underlying idea that nature can constitute public wealth.
A New Definition of Sovereign Wealth
That may ultimately be the standard’s greatest significance.
Destroying a forest can increase GDP while simultaneously reducing a country’s natural wealth. Restoring that forest can appear primarily as an expenditure even if it protects water supplies, reduces disaster risk and supports economic activity for decades.
IPSAS 51 does not resolve that contradiction.
But it gives governments a structured way to begin recognizing some natural resources as public assets.
The next step is connecting those financial statements with natural-capital accounts, fiscal policy and investment decisions.
The question facing ministries of finance is shifting from how much governments should spend to protect nature to how governments manage nature as part of national wealth.
From Accounting to Action: Nature Summit at UNGA
That next step will be at the center of the Nature Summit at the 81st United Nations General Assembly, an invitation-only leadership gathering at UN Headquarters in New York on September 24, 2026.
Chaired by Prime Minister Lord Fatafehi Fakafānua of the Kingdom of Tonga, the Summit will bring together leaders from government, capital, industry, philanthropy and multilateral institutions to explore how natural assets can be translated into investment, resilience and economic opportunity.
Its focus reflects the broader shift underway in public finance: moving beyond treating forests, oceans and other living systems principally as environmental concerns and toward recognizing them as assets capable of supporting long-term prosperity.
IPSAS 51 can help governments recognize certain natural resources within public-sector financial statements. Natural-capital accounting can provide a broader picture of national wealth.
The harder task is building the financial, legal and investment architecture capable of turning that recognition into capital for conservation, restoration and sustainable growth.
The question is no longer simply whether nature has economic value.
It is how governments, investors and philanthropies can finance it as an asset.
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