The Global Natural Capital Index 2025

The Natural Capital of a country is defined by the natural physical environment. The Natural Capital model incorporates the essence of resources available that allow a country to be completely self-sustaining: land, water, climate, biodiversity, food production and capacity, as well as renewable and non-renewable energy and mineral resources. In addition, the level of depletion or degradation of those resources that could endanger future self-sufficiency are taken into account to reflect the full picture of the available natural capital.

The index is based on evaluating availability and abundance, quality, and status of health or deterioration of biodiversity, water, agricultural potential, soil, and the availability of natural mineral and organic resources. The index evaluates quantitative indicators only, therefore policies and environmental management systems are not included in the assessment. The Global Sustainable Competitiveness Index 2025 reveals which nations possess the natural capital essential for long-term self-sufficiency.

Global Natural Capital Rankings 2025

Global Natural Capital: Scores and Trends

Natural capital performance varies dramatically across nations, from minimum to ideal ecological health:

Global averages show natural capital ranges from minimum (18) to maximum (62), compared to the ideal (100), with average performance at 42—indicating substantial environmental degradation worldwide.

Environmental trends reveal 42% of countries show positive improvements in forest cover and air quality, while 48% demonstrate negative trends from deforestation and pollution, and 10% remain neutral.

Understanding Natural Capital Components

The Natural Capital Index evaluates multiple environmental dimensions across six core sub-indices:

Resource-Rich Nations: Natural Capital Leaders

High-ranking countries are characterised by abundant water availability, the source of a rich biodiversity. Many of the highest scoring countries are located in tropical areas. While some of these countries currently may lack social, intellectual and governance capital, their Natural Capital would allow them to develop sustainable competitive economies over time. A certain correlation with the level of human activities and population density can also be observed: large countries with a comparably small population density and rich biodiversity tend to score higher.

Tropical forest nations like Laos (#6), Central African Republic (#8), and Bhutan (#10) rank highly due to biodiversity-rich rainforests and limited industrial development. However, these rankings reflect natural endowment rather than sustainable management—deforestation pressures remain significant threats.

Developed Economies: Balancing Growth and Conservation

Nordic countries demonstrate that advanced economies can maintain natural capital through deliberate policy. Finland (#4) and Sweden (#23) combine strong forest industries with sustainable practices. Their success shows that economic development and environmental preservation are compatible through innovation and robust environmental governance.

However, most developed economies rank lower. The United Kingdom, Germany, and Japan face constraints from dense populations, historical deforestation, and industrial pollution legacies. Urbanization and agricultural intensification have reduced natural habitat and biodiversity.

Emerging Economies: Development vs. Conservation Trade-offs

China, India, and Brazil face acute natural capital challenges. Rapid industrialization, agricultural expansion, and urbanization have degraded air quality, depleted freshwater resources, and accelerated deforestation. China's air pollution, India's water scarcity, and Brazil's Amazon deforestation illustrate the environmental costs of development-first policies.

These nations possess substantial natural resources but face unsustainable exploitation rates. Without policy shifts toward conservation, restoration, and pollution control, environmental degradation will constrain long-term economic prospects and quality of life.

Why Natural Capital Matters for Competitiveness

• Ecosystem Services: Forests regulate climate, purify water, prevent erosion, and support agriculture—services worth trillions annually
• Resource Security: Countries with abundant natural capital face fewer supply vulnerabilities for food, water, timber, and minerals
• Climate Resilience: Healthy ecosystems buffer against extreme weather, droughts, and floods increasingly common under climate change
• Health and Productivity: Clean air and water directly impact population health, reducing healthcare costs and improving workforce productivity
• Tourism and Recreation: Natural beauty and biodiversity drive tourism revenues, particularly for nations with protected wilderness and wildlife

The Natural Capital Crisis

Despite growing awareness, global environmental trends remain dire. The world has lost over 420 million hectares of forest since 1990—an area larger than India. Wildlife populations have declined 69% on average since 1970. Air pollution causes over 7 million premature deaths annually. Freshwater resources face unprecedented stress from overuse and contamination.

These trends stem from economic models that treat natural capital as infinite and free. Environmental costs are externalized from prices, creating incentives for exploitation. Agricultural subsidies reward forest clearing. Energy policies favor polluting fuels. Land development ignores ecosystem value.

The Natural Capital Index 2025 demonstrates that environmental preservation and economic prosperity are interdependent. Finland and Canada show that nations can maintain substantial natural capital while achieving high living standards. Their example provides hope that restoration is possible—but requires fundamental policy shifts that value natural systems as essential economic infrastructure rather than disposable resources.