New accounting rules treat forests and wetlands as financial assets
A new accounting framework will classify ecosystems as financial assets under global standards. The COP30 IFRS Framework for Nature, unveiled on October 26, 2025, adapts existing IFRS rules (IAS 37 and IAS 38) to treat natural systems, such as forests, wetlands, and mangroves, as auditable infrastructure on corporate and government balance sheets. Led by the Sustainable Markets Initiative (SMI), the initiative standardizes how investors, governments, and auditors assign measurable economic value to nature.
The framework follows a Vatican meeting where King Charles III led the SMI delegation in an audience with Pope Leo XIV, aligning faith, finance, and accounting in service of creation. Dr. Hubert Danso, CEO of Africa Investor and co-chair of the SMI Africa Council, stated from the Vatican, “Investors cannot price what accounting fails to define.” The report converts ecological stability into quantifiable assets.
This development is part of the SMI’s Nature Lighthouse Report Series, which includes policy recommendations for the G20 and BRICS nations. The COP30 framework links accounting standards with global financial systems, including the EU’s sustainable finance taxonomy, the African Union’s Nairobi Declaration, the Commonwealth Heads of Government Sustainable Finance Initiatives, the International Sustainability Standards Board (ISSB), the Taskforce on Nature-related Financial Disclosures (TNFD), and the ASEAN Taxonomy for Sustainable Finance. Brazil, hosting COP30, framed the report as essential for integrating nature into investment decisions.
The approach relies on existing IFRS rules but requires auditors and regulators to reinterpret how natural assets appear on financial statements. For instance, a mangrove’s ability to capture carbon could now be classified as a long-term asset, comparable to industrial infrastructure. The report does not introduce new standards but offers guidance on applying current rules to ecosystems.
