Improved ecosystem condition but reduced services? Modelling corporate land use effects on a watershed in Mauritius.

Land-use change is a leading driver of climate change and biodiversity loss. In this context, Natural Capital Accounting (NCA) is emerging as a tool for assessing impacts on- and dependencies from- nature at various levels, including businesses in their direct operations and along value chains. NCA can thus contribute to discussions of sustainability on how investments contribute to public and private value creation. While such analyses have been undertaken in resource extraction industries such as mining and forestry, real estate applications are scarce, and prospective modelling is increasingly required in order to inform future land use decisions that will reverse biodiversity loss alignment with the Kunming-Montreal Global Biodiversity Framework. In this study, we applied NCA methods to three land-use scenarios for a 1,300-hectare corporate estate in Mauritius, a Small Island Developing State (SIDS) which has consistently attracted between half and two-thirds of its foreign direct investment in the real estate sector over the recent years. Notably, a financially maximising urban scenario developed over 25 years (2025-2049) would marginally improve the watershed ecosystem condition (calculated as per the UN System of Environmental Economic Accounting, Ecosystem Accounting - SEEA-EA), but halve societal value via ecosystem services compared to a do-nothing scenario. Business value, on the other hand, would be increased 37-fold. In contrast, a low-density agro-residential development scenario would grow business value 20-fold and societal value 3-fold. The findings highlight the importance of assessments in both biophysical and monetary terms, since the disclosure of impacts on ecosystem condition alone may mislead stakeholders on the societal value of corporate projects. Consequently, the study underscores the methodology’s potential to complement existing environmental assessment tools and inform land use planning at both national and subnational levels, with promising implications for enlightening discussions around value creation for the public or common good from the perspective of sustainable land utilisation.