LAYER 3: ECOSYSTEM SERVICES
Ecosystem Services
What nature provides – the foundation of all economic value.
Understanding the benefits, and the emerging markets that price them.
IN THIS SECTION
In 30 Seconds
Ecosystem services are the benefits nature provides to people and the economy. Scientists organise them into four types:
- SupportingFoundation services that enable everything else (nutrient cycling, soil formation)
- ProvisioningResources we extract (food, water, timber, fibres)
- RegulatingProcesses nature manages (climate regulation, pollination, flood control)
- CulturalIntangible benefits (recreation, spiritual value, aesthetic appreciation)
Why it matters now: Markets are emerging for regulating services (carbon credits, biodiversity credits). Supply chains are under scrutiny for provisioning impacts (EUDR, deforestation-free). Supporting services are the next frontier (soil health payments, regenerative agriculture premiums).
Key Distinction: Ecosystem Services vs Nature-Based Solutions
Ecosystem Services (this page)
What nature provides – the benefits that flow from functioning ecosystems.
- • Pollination (bees pollinate crops)
- • Carbon sequestration (forests absorb CO2)
- • Flood regulation (wetlands slow water)
- • Water purification (ecosystems filter water)
These happen whether humans intervene or not.
Nature-Based Solutions
Deliberate human interventions – actions to protect, restore, or create ecosystems that address societal challenges.
- • Creating woodlands to sequester carbon
- • Restoring peatlands to stop emissions
- • Protecting mangroves from destruction
- • Managing farmland for soil carbon
These are deliberate human interventions.
The relationship: NBS (what you do) generates or protects Ecosystem Services (what nature provides). Planting a woodland (NBS) creates carbon sequestration capacity (ecosystem service).
Where This Fits
Ecosystem Services is Layer 3 in our 5-layer sustainability model:
L3 is the translation layer – where the physical reality of ecosystems (L1-L2) becomes economic value that flows into corporate strategy (L4-L5). It's where natural capital becomes commodities and credits, ecosystem processes become monetisable services, and corporate dependencies become measurable risks.
The Four Service Types
Supporting Services
The foundation that enables everything else
Services that maintain ecosystem functions: nutrient cycling, soil formation, water cycling, photosynthesis.
Economic relevance: Emerging – soil carbon markets, regenerative agriculture premiums.
The next frontier. Early movers are positioning for significant growth.
Provisioning Services
What we extract from nature
Tangible products from ecosystems: food, freshwater, timber, fibres, genetic resources.
Economic relevance: Established – commodities, supply chains, certifications.
Current focus: EUDR compliance, deforestation-free supply chains, sustainable sourcing.
Regulating Services
How nature manages vital processes
Processes that regulate environment: climate regulation, water purification, pollination, pest control, flood mitigation.
Economic relevance: Growing – carbon credits, biodiversity credits, PES, watershed payments.
This is where the most dynamic markets are emerging.
Explore Regulating Services →Cultural Services
The intangible benefits
Non-material benefits from nature: recreation, aesthetic value, spiritual significance, educational value.
Economic relevance: Partial – tourism, heritage, wellbeing programmes.
Often overlooked, increasingly valued in tourism, hospitality, and real estate.
How Value Flows
Ecosystem services don't sit still – value flows through the system:
Landscapes (L2)
Where services are produced
Value Chains (L3)
Where services become tradeable
Corporates (L5)
Where services are purchased
Finance Flows Down
Corporate credit purchases fund landscape stewardship
Data Flows Up
MRV provides evidence for disclosure and verification
Who Operates Here
Producers / Land Stewards
Supply side of ecosystem services
Which services does my land provide? Which can I monetise?
Corporates / Buyers
Demand side of ecosystem services
What are my dependencies? How do I procure credible credits?
Intermediaries / Aggregators
Market makers and facilitators
How do I structure blended revenue from multiple service types?
Investors / Finance
Capital deployment
What are the emerging opportunities as markets mature?
Current State of Markets
Mature
Commodity markets (provisioning), certification premiums, compliance carbon markets (EU ETS, UK ETS)
Growing
Voluntary carbon markets, Biodiversity Net Gain (UK mandatory), watershed PES schemes
Emerging
Soil carbon credits, regenerative agriculture premiums, voluntary biodiversity credits, stacked credits