Natural capital accounting for sustainable cities

Countries are increasingly identifying the location and quality of natural capital (NC) and the benefits it provides, extending these assessments beyond rural areas to include cities (Willis and Petrokofsky 2017). To better evaluate urban sustainability, an economic framework based on the Inclusive Wealth Index (IWI) has been introduced, enabling cities to benchmark their capital accumulation and identify key drivers such as efficiency, priority, and scale, which inform smarter, budget-conscious policy decisions (Fujii and Managi 2019). However, excessive use of NC poses significant risks, as depleting one form of NC and substituting it with another or with produced capital (PC) undermines sustainability in a strong sense (Islam et al. 2019). Unlocking the full potential of NC for sustainable cities requires greater attention to the deeper dimensions of urban planning, particularly the human–nature connection (Harms et al. 2024). Achieving systemic change for sustainability involves reconnecting people to nature, restructuring institutions, and rethinking knowledge creation—three leverage points that together serve as a boundary object for transformational sustainability science (Abson et al. 2017). This transformation is necessary because unsustainability often arises from cognitive illusions and a lack of purpose-driven thinking, calling for a fundamental shift in how we relate to the world through a living-systems lens that embraces dynamic inclusion, value, and nested leverage points to establish a new sustainability paradigm (Davelaar 2021).