The concept of natural capital was first used by E.F. Schumacher in his book Small Is Beautiful (1973). In the same book Schumacher wrote:

To press non-economic values into the framework of the economic Calculus… it is a procedure by which the higher is reduced to the level of the lower and the priceless is given a price. It can therefore never serve to clarify the situation and lead to an enlightened decision. All it can do is lead to self-deception or the deception of others; for to undertake to measure the immeasurable is absurd and constitutes but an elaborate method of moving from preconceived notions to foregone conclusions…The logical absurdity, however, is not the greatest fault of the undertaking: what is worse, and destructive of civilisation, is the pretence that everything has a price or, in other words, that money is the highest of all values. (p. 27)

Dr. Sian Sullivan describes the current meaning of the concept of natural capital as having its origins in the formation of the World Business Council for Sustainable Development (WBCSD) at the first Rio United Nations Conference on Environment and Development (UNCED) Earth Summit in 1992. The concept of natural capital gained popularity in business circles as a way of thinking about environmental governance and has encouraged by environmentalists such as Jonathan Porritt. Now, four decades since the concept was first coined, the idea has metamorphosed. The notion of nature as natural capital, and as equivalent to capital in the bank, is being adopted by the UK government. In 2011, then UK Environment Minister Caroline Spelman launched the report The natural choice: Securing the value of nature with the statement;

“…if we withdraw something from Mother Nature’s Bank, we’ve got to put something back to ensure that the environment has a healthy balance and a secure future” (2011).

By 2012, the UK established a Natural Capital Committee and economists began preparing to include a value for ‘natural capital’ in Britain’s GDP calculations by 2020. Meanwhile, at an international level, the Bank of Natural Capital website was launched in 2011 by The Economics of Ecosystems and Biodiversity (TEEB) project, a programme supported by the United Nations and European Union. Within the Bank of Natural Capital, Sullivan explains that “nature’s stocks and flows are depicted such that they accord with the format of a standard online current bank account”. Herein nature’s processes are reduced to numbers that can be traded like other financial instruments.