This is the third of a four-part series from Prospr Aligned’s head of corporate engagement and proxy voting expert, Jerry Bowyer.
One of the most important developments in corporate governance today is also one of the least understood. The ESG conversation is moving beyond carbon and climate disclosures toward something broader: the measurement and reporting of nature itself.
The ISS survey asks whether companies should increasingly incorporate nature-related risks into governance and disclosure systems through frameworks such as TNFD and SBTN. On its face, that sounds like a technical reporting question. In reality, it is a question about power. Who decides how land should be used? Who decides whether a forest, a field, a water source, or a parcel of undeveloped property is creating value? And what happens when those decisions begin migrating from local communities, owners, and managers into governance frameworks administered through investors, lenders, ratings agencies, and proxy advisors?
The Natural Asset Company controversy exposed these concerns. Critics were not objecting to conservation. They were objecting to a framework that increasingly treats preservation itself as an economic asset. For most of human history, land created value because it was used productively. It fed people, produced energy, supplied minerals, supported businesses, and generated economic growth. Natural-asset theories introduce a competing vision in which land can generate value precisely because it remains undeveloped.
That distinction sounds subtle, but it has substantial implications for capital allocation. Once biodiversity, habitat preservation, ecosystem services, watershed protection, and other environmental characteristics become measurable governance metrics, they can become investment metrics as well. Investors can reward them. Lenders can prefer them. Ratings firms can score them. Proxy advisors can build expectations around them. No law needs to prohibit development if enough institutions begin systematically favoring non-development.
This is why nature accounting deserves more scrutiny than it typically receives. Advocates often describe it as a neutral measurement exercise. But measurement is rarely neutral. What gets measured gets managed. What gets managed eventually begins influencing how capital is allocated. The concern is not that a company will suddenly be prohibited from building infrastructure, expanding production, developing property, or pursuing growth. The concern is that governance systems increasingly place a thumb on the scale in favor of preservation and against productive activity.
The framing of the ISS survey deserves attention here. The survey generally assumes that nature-related reporting frameworks belong within corporate governance and asks how companies should operate under those frameworks. Missing from the discussion is a more basic question: should they be embedded in governance at all?
The available responses largely contemplate maintaining current expectations or moving further in that direction. There is little consideration of whether nature-accounting systems are material to shareholder value, whether they impose costs that exceed their benefits, or whether fiduciaries may reasonably prefer less reliance on these frameworks rather than more.
That is the larger pattern.
Nature accounting is presented as disclosure. In practice, it functions as governance.
Governance affects incentives. Incentives affect capital flows. And capital flows ultimately determine whether a society directs resources toward development or preservation.
The fiduciary question is therefore straightforward. Do these frameworks improve long-term shareholder value, or do they gradually transform corporate governance into a mechanism for advancing environmental objectives that may or may not align with the interests of shareholders?
That is the debate investors should be having. Not how aggressively to implement nature accounting, but whether it belongs at the center of corporate governance in the first place.