a more deliberate and nuanced approach to discounting, whilst recognizing the pluralistic nature of capital contributions within the global network of goods and services.
One could argue that natural capital is already embedded within financial models through load factors, for instance, solar energy, which is accounted for at a given rate of X hours per day, converted into cash flow, and discounted accordingly. However, this does not invalidate the case for pluralistic discounting, as not all forms of natural capital function in the same way. Solar energy is a renewable input that does not diminish with use, unlike finite resources such as forests, biodiversity, or clean water, which degrade over time and require different discounting approaches. The inclusion of solar energy in financial models reflects its operational role rather than the intrinsic, long-term value of natural ecosystems. Moreover, financial discounting for solar energy is based on cash flow predictability rather than broader sustainability considerations, whereas pluralistic discounting addresses the fundamental issue of resource depletion and intergenerational equity. While renewable energy infrastructure benefits from conventional financial modelling, many forms of natural capital provide irreplaceable ecosystem services that, if depleted, cannot be restored through market mechanisms. This distinction highlights that pluralistic discounting is not a rejection of financial methodologies but a necessary refinement. Traditional models adjust discount rates based on risk; similarly, acknowledging the unique characteristics of different types of capital - such as the irreversible loss of biodiversity or the long-term impact of carbon sinks - warrants a differentiated approach. Even within financial markets, risk-adjusted discounting is standard practice, reinforcing the logic that sustainability risks should factor into investment valuations. Ultimately, while certain aspects of natural capital, such as solar energy, fit within conventional financial modelling, this does not negate the need for a broader approach. The core argument remains that discount rates should align with the regenerative capacity, scarcity, and long-term systemic value of different capital forms, rather than applying a uniform discounting mechanism that risks undervaluing critical natural assets.
Summary
In response to the limitation of monological discounting, we suggest using pluralistic discounting models to reflect the various forms of capital contributions (e.g., built, human, social and natural) adjusted for materiality. This acknowledges the fact that the capital forms are inherently different and, therefore, require distinct and tailored approaches to discounting. Ultimately this captures a more holistic view, as well as risks and opportunities whilst incorporating finite and non-finite resources.
Next, we set our third solution to intertemporal myopia: intergenerational equity.
Intergenerational Equity
We suggest that a multivocality approach exposes the deficiencies of short-term time horizons in evaluating investments with long-term impacts. Specifically, this framing highlights the issue of intergenerational equity where current generations recognise the value of investments that improve the welfare of future generations as well as of their own.
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