Original Article by:
Xavier G.H. Koenig, Sustainability and Climate Change Programme, Université des Mascareignes
Nicolas Meisel, Sustainability and Climate Change Programme, Université des Mascareignes
Dr Prakash N.K. Deenapanray, Adjunct Professor, Université des Mascareignes
Summary
Amidst growing land scarcity and increased vulnerability of ecosystems, Mauritius, like most Small Island Developing States (SIDS) face the challenge of balancing economic development with biodiversity and climate urgency. While the “Smart City” model adopted by the real estate sector attract foreign investment and appears to maximise shareholder profits, it fails to respond to national priorities such as food security, biodiversity conservation and climate resilience. This research therefore calls for policymakers to integrate Natural Capital Accounting (NCA) into sustainable land use planning, Environmental Impact Assessments (EIAs) and Strategic Environmental Assessment (SEA) to better align private land use with national and global goals. It also demonstrates how shifting from a “Business-as-Usual” smart city model to an Agro-Residential “Agrihood” model that blends low-density housing with organic farming and agroforestry can balance financial return with societal benefits.
Introduction
Mauritius faces a dilemma common to Small Island Developing States (SIDS): how to balance economic development with limited land resources and vulnerable ecosystems. Since the early 2000s, corporate landowners have diversified land uses beyond the dominant sugarcane cultivation to include a higher share of real estate; developing "smart cities" to attract foreign investment (Koenig and Deenapanray, 2024). While this strategy drives growth, the environmental and societal trade-offs remain largely unmeasured.
Businesses are increasingly waking up to the fact that damaging nature poses a direct financial risk to their own operations and assets (Jones et al., 2026). However, experts argue that nature shouldn't be valued only when it affects shareholder profits (Barker, 2019). Instead, we need tools like Natural Capital Accounting (NCA) to hold corporations accountable for their environmental footprint, ensuring they balance their financial interests with their responsibility to society and the planet.
A new case study in the real estate sector reveals that while standard real estate models currently appear to maximise corporate profit, they fail to integrate the environmental cost in their business model. By applying NCA, developers and policymakers can identify alternative land use pathways that secure both profitability and public goods like food security, biodiversity restoration and climate resilience.
The study evaluates three distinct land use scenarios for the Ferney estate, in the South East of Mauritius: a "Do Nothing" baseline where current land use remains unchanged (SC1); a "Business as Usual" smart city model prioritising residential development for financial maximisation (SC2); and an alternative Agro-Residential,termed “Agrihood”, approach that blends low-density housing with organic farming and agroforestry to balance financial returns with societal benefits (SC3).
The Hidden Costs of "Business as Usual"
The current "Smart City" model, referred to in the study as the "Business as Usual" (BAU) scenario, prioritises urbanisation, with some sugarcane cultivation as the remaining agricultural activity. In [A2] modelling the Ferney estate over a 25-year period (2025–2049), this scenario involves converting agricultural land into relatively high-density residential and mixed-use units, with some added ecological corridors, but without agricultural diversification.
The research highlights a stark "value appropriation asymmetry” (Ritala et al., 2021). Under this scenario, business value skyrockets by 37-fold, generating over USD 100 million in undiscounted value through property sales. Yet, this financial prospect would come at a cost, albeit indirectly, to the public: the research shows that societal value is more than halved compared to doing nothing. By focusing on private financial returns, this model essentially capitalises on land assets – i.e. extracting maximum land rent - while reducing the land’s ability to support biodiversity and to provide ecosystem services like climate regulation, food production and natural habitat, among others.
A Viable Alternative: The "Agrihood" Model
Is there a middle ground? The study investigates an alternative agro-residential scenario ("Agrihood" or SC3), characterised by low-density residential development integrated with agroforestry and food crops. This model departs from mainstream smart city masterplans by converting all the remaining sugarcane land to organic farming, in addition to the same ecological corridors as those of SC2 (BAU).
Unlike the conventional approach, this model proves that financial viability and societal benefit are not mutually exclusive:
- Financials: Business value still increases significantly: approximately 20-fold compared to the baseline "do-nothing" scenario.
Societal Wins: Societal value more than doubles. This scenario generates significant public benefits through food crop production, fruit orchards, and enhanced carbon storage.
This alternative approach aligns private land use with national and global goals. It supports the Nationally Determined Contribution (NDC) (Republic of Mauritius, 2021) for climate change by reducing net emissions from land use change and bolsters national food security strategies, showing that private land can still deliver public goods. It is also better aligned with the land degradation neutrality target of the UN Convention on Combatting Desertification and the long-term nature-positive outcomes of the Kunming-Montreal Global Biodiversity Framework (under the UN Convention for Biological Diversity).
Transforming Policy with Natural Capital Accounting
Adopt Natural Capital Accounting for sustainable land use planning: The Environment Masterplan 2022-2030 explicitly mentions the adoption of NCA to inform sustainable land use planning in Mauritius. NCA offers the possibility to assess the impacts of alternative future land use planning scenarios on nature, thereby providing valuable information for steering land use policy-making (e.g. National Development Strategy) and for justifying trade-offs where necessary.
Integrate Natural Capital Accounting into Environmental Assessments: Current Environmental Impact Assessments (EIAs) in Mauritius often lack rigorous analysis of alternatives. They rarely quantify the long-term economic trade-offs between private development and public ecosystem services.
Policymakers should integrate NCA into the EIA and Strategic Environmental Assessment (SEA) processes (Republic of Mauritius, 2024). This would ensure that when land use changes are proposed, stakeholders (e.g. regulators) can clearly see the "profit and loss" for nature and society. This aligns with the Environment Act of 2024, which requires the description of alternative processes to cause less harm to the environment.
Governance: Governance frameworks should steer private land-use decisions to contribute to national public goals rather than just shareholder profit. Private estates can and should contribute to the Nationally Determined Contribution (NDC) for climate change (via carbon sequestration), the National Biodiversity Strategy (Republic of Mauritius, 2017) (via restoration and conservation), and national food security (via preserving agricultural land).
Reliability: Corporate NCA also has the potential to improve consistency in biodiversity offset policies. A common framework would ensure that offsets proposed by the private sector are methodologically aligned with government conservation efforts and eventual targets such as ‘no net loss’. In addition to its valuation of ecosystem services, the study also provides an ecosystem condition index for each scenario.
Leverage Sustainable Finance Opportunities: Policymakers and businesses could also utilise natural capital data to unlock sustainable finance instruments (e.g., green bonds or sustainability-linked loans). Robust environmental data can help secure lower interest rates and attract investment into nature-positive projects.
What Lies Ahead?
Mauritius is at a crossroads where land scarcity meets biodiversity and climate urgency, as well as increasing food insecurity. Continuing with a financial maximisation paradigm risk locking the country into a future of high inequality and environmental degradation.
To ensure a nature-positive future, governance frameworks must evolve. By demanding transparency through Natural Capital Accounting, regulators can steer development toward models that serve business interests while simultaneously securing the common good ensuring that the "Mauritian miracle" continues in a sustainable form.
--
You can read the full article here: Xavier G.H. Koenig, Nicolas Meisel, Prakash N.K. Deenapanray, Generating societal value from natural capital on corporate-owned land: a real estate case study from Mauritius. Journal of Environmental Management, Volume 398,2026, 128418, https://doi.org/10.1016/j.jenvman.2025.128418
References:
Barker, R., 2019. Corporate natural capital accounting. Oxf. Rev. Econ. Pol. 68–87.
Jones, M., Polasky, S., Rueda, X., Brooks, S., Ingram, J. C., von Hase, A., Egoh, B., Kohsaka, R.,Kulak, M., Leach, K., Loyola, R., Mandle, L., Rodriguez Osuna, V., Schaafsma, M., & Sonter, L. (2026). IPBES Business and Biodiversity Assessment: Summary for Policymakers. Zenodo. https://doi.org/10.5281/zenodo.18538597
Koenig, X., Deenapanray, P., 2024. Land use and environmental degradation in the island state of Mauritius: governance and problem conceptions. Land Use Policy, 107332.
Ministry of Environment, Solid Waste Management and Climate Change (MESWMCC) (2023) Environment master plan (2020–2030) for the Republic of Mauritius. Port Louis: MESWMCC.
Republic of Mauritius, 2017. National Biodiversity Strategy and Action Plan 2017-2025. Port Louis: Republic of Mauritius.
Republic of Mauritius, 2021. Update of the Nationally Determined Contribution of the Republic of Mauritius. Port Louis: Republic of Mauritius
Republic of Mauritius, 2024. The Environment Act 2024. Act No. 3 of 2024. Government Gazette of Mauritius, Port Louis, Port Louis, Mauritius.
Ritala, P., Albareda, L., Bocken, N., 2021. Value creation and appropriation in economic, social, and environmental domains: recognizing and resolving the institutionalized asymmetries. J. Clean. Prod., 125796
Disclaimer: To bridge the gap between complex research and accessible reading, we use AI to assist in our writing process. However, every summary is human-authored and must pass a validation check by the original study’s author before publication.
Main Photo from Freepik
Charles Telfair Centre is an independent nonpartisan not for profit organisation and does not take specific positions. All views, positions, and conclusions expressed in our publications are solely those of the author(s).
