"While our economic systems are remarkably sophisticated when it comes to measuring certain forms of value, that generated by a healthy ecosystem remains largely absent from ordinary mechanisms," regrets David French, CEO of My Drop In The Oceans.
We often reproach companies, investors and governments for reacting too slowly to ecological issues. Yet they all largely respond to the signals sent to them by the economy. So the fundamental question may be elsewhere: why do these signals arrive so late?
When a forest burns, when a drought threatens the water supply, or when an extreme weather event destroys infrastructure, the lost ecological value suddenly becomes visible. More precisely, it is often not the value itself that appears, but the cost of its disappearance. This manifests in insurers’ balance sheets, public budgets, business continuity plans, real estate prices, and the burdens borne by households.
However, this visibility arises precisely at the moment when it no longer allows the loss to be avoided. Adaptation then becomes necessary, where prevention might sometimes have been sufficient. This temporal mismatch is no accident. It reflects a structural characteristic of our economic systems: ecological value only becomes fully legible once it has been transformed into risk, cost, regulatory constraint or loss of value. As long as it remains intact, it remains largely invisible.
The value generated by a healthy ecosystem remains largely absent from ordinary economic mechanisms.
Our economic systems are remarkably sophisticated when it comes to measuring certain forms of value. They record capital flows, incomes, margins, credit risks, expected returns and price variations. Over the years they have learned to incorporate governance indicators and, more recently, some social and environmental dimensions.
Yet the value generated by a healthy ecosystem remains largely absent from ordinary economic mechanisms. Hydrological stability, local climate regulation, pollination, soil fertility or a territory’s ability to withstand climatic extremes create very real value. Yet that value is rarely reflected in the price of a raw material, in the return on a financial asset, or in the cost of an everyday consumer product.
It is not because it does not exist, but because our systems have not yet been designed to make it visible where decisions are made. As noted in the Dasgupta Report, published in 2021 at the request of the UK government, natural capital underpins all prosperity but is structurally undervalued in economic decision-making. This is not a moral judgment, but a design problem.
It is tempting to attribute this gap to a lack of will. Some companies would wait to be forced to act. Consumers would systematically choose price. Governments would shy away from difficult trade-offs. This diagnosis contains some truth. But it remains incomplete.
A company that externalizes certain environmental costs is not necessarily acting in bad faith. It responds to the economic framework as it is structured today. A consumer who chooses the cheapest option rather than the most sustainable is not necessarily indifferent. They are adapting to an immediate economic constraint. An investor who underweights nature-related assets does not always lack vision. They allocate capital according to the performance indicators they have available.
The problem is therefore not only that actors behave badly within an otherwise well-designed system. The problem is that the system itself generates incomplete signals and that, in this context, perfectly rational behaviors can lead to collectively harmful outcomes. It is not only a failure of values. It is also a failure of valuation.
This reflection echoes an observation increasingly present in work on behaviors and the transition: information alone rarely suffices to durably change choices when signals and incentives continue to encourage other behaviors.
As long as markets do not perceive its ecological value, it is structurally difficult to finance preservation actions.
This lag has a direct consequence for the ecological transition: it too often makes it reactive. Environmental regulations generally intervene once damages have become visible or socially unacceptable. Carbon markets were designed to correct an already massive externality. Green finance instruments mobilize capital toward solutions that have become necessary, even though their need could have been anticipated much earlier.
These mechanisms are useful. Some are even indispensable. But they obey a common logic: make visible what should have been visible earlier, then finance the correction of what might sometimes have been avoided. The summer comfort of buildings is a concrete example.
For decades, a building’s value was associated with its location, floor area, construction quality or winter energy performance. Today a new criterion is emerging: its ability to remain habitable during heat waves. What yesterday was an environmental concern is gradually becoming a full-fledged economic factor. The market is beginning to understand it, but only because the problem is arising more and more.
This delay in signals slows the allocation of capital toward solutions that could have been developed much earlier. As long as markets do not perceive ecological value before it translates into a cost, it is structurally difficult to finance preservation actions. What is sometimes presented as a financing problem for the transition is perhaps also, in part, a problem of upstream economic signaling.
Many initiatives today seek to make dependencies on nature more visible. Natural capital accounting, reporting frameworks, nature-related risk disclosure mechanisms and new impact indicators are important advances. They help to better understand the dependencies, vulnerabilities and externalities that structure our economies.
But one question remains: how to ensure that these realities become visible early enough to influence certain decisions, and not simply to explain their consequences? A company can publish an exemplary report on its dependencies on nature. An investor can have more precise information on ecological risks. A consumer can know the environmental impact of their choices.
Yet if the economic signals that accompany these decisions remain unchanged, behaviors may also remain unchanged. Measuring a value does not necessarily mean it becomes tangible in everyday choices. An indicator can inform a strategy. It does not thereby change a concrete trade-off, a price, a purchase, an investment or a behavior.
Making a reality visible is an essential step. But that visibility must then be translated into capital allocation, investment choices, purchasing decisions and public policies. The question is therefore not only to better measure nature. It is also to understand how that value can circulate through economic systems before it is destroyed.
Our challenge is to learn to recognize the value of ecological realities before they manifest as costs, losses or constraints.
The ecological transition is often presented as a problem of technology, financing or regulation. These dimensions are clearly essential. But they do not entirely answer a more fundamental question: how to design economic systems capable of recognizing the value of what makes them possible?
It is a question of governance. Of mechanisms. Of indicators. Of incentives. Of value distribution. And perhaps also of temporality. The later an ecological reality becomes visible, the more costly its consideration is. Adaptation replaces prevention. Constraints replace choices. Losses replace value.
Switzerland, with its institutional tradition, financial expertise, pragmatic federalism and culture of consensus, could be particularly well placed to contribute to this reflection. Its history shows that it has sometimes been able to experiment with original institutional or economic innovations to respond to systemic challenges—the WIR network is often cited among these examples. Not by waiting for ecological realities to turn into crises, but by helping to design systems capable of recognizing them upstream.
The real challenge may therefore not only be to adapt our economies to the consequences of climate change. It is to learn to recognize the value of ecological realities before they manifest as costs, losses or constraints.
For a society that only perceives the value of nature when it begins to disappear is condemned to pay ever more for what it could have preserved. From this perspective, the central question is not only: how to finance the transition? It is also: how to ensure that the economy stops seeing too late what it has always depended on?
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