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Natural capital accounting 1,2 will confirm what we know -without change we are headed for environmental disaster resulting from economic growth. We propose a Natural Capital Bank, a new institution to help maintain natural capital adequacy and chart a course to a sustainable future via accounting. In March 2021, the nations of the world adopted standards for natural capital accounting called the System of Environmental-Economic Accounting (SEEA) Ecosystem Accounting 3 . Our proposal is to take the next step towards sustainability by institutionalising the management of natural capital by government via accounting through a Natural Capital Bank. Dialogue with our peers about the merits of our proposal has revealed scepticism, raised many questions and shown different understandings about current institutions, why they have failed and how these failures could be addressed. But the problem is generally agreedwithout change we are headed for environmental disaster. To make the case for a Natural Capital Bank, we briefly recap some of what is well-known within individual disciplines, but maybe less well-known to the multidisciplinary readership of Nature Sustainability. We acknowledge that more than accounting and banking is needed to achieve lasting change, and that even if our proposal is accepted theoretically by the academic community, adoption by government would nevertheless still require strong leadership and considerable political will. Natural capital decline and accountingNatural capital is defined by Bateman and Mace 4 as: "those renewable and non-renewable natural resources (such as air, water, soils and energy), stocks of which can benefit people both directly (for example, by delivering clean air) and indirectly (for example, by underpinning the economy)". Managing natural capital is problematic because the responsibility for it is fragmented between nations, within different institutions of governments, or considered the commons 5 . Compounding the problem is that we do not know exactly how much natural capital we have, how much we need, how it is changing, and to what degree, if any, natural capital is substitutable 6 . What we do know is the natural capital balance is declining and that we are approaching 7 or may have already crossed, some critical ecological thresholds 8 . To address natural capital decline, goals and targets have been set via international agreements like the Paris Agreement on climate change, the Convention on

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Two key pieces of Australian legislation regarding the protection of biodiversity and forest management are the federal Environment Protection and Biodiversity Conservation (EPBC) Act 1999 and the Regional Forest Agreements (RFA) Act 2002. Both have significant deficiencies. A Federal Court ruling associated with a challenge to the Victorian Government-owned logging company, VicForests, by a community environmental group (Friends of Leadbeater’s Possum Inc.) found that RFAs are exempt from the EPBC Act. There was an argument of legal interpretation concerning the exemption in the EPBC and RFA Acts relating to RFA forestry operations that are conducted ‘in accordance with’ an RFA. The Court held that ‘in accordance with’ only required that forestry operations be ‘conducted under’ an RFA rather than ‘in compliance’ with it. Therefore, the mere existence of the RFA is enough to exclude the biodiversity protections of the EPBC Act, even where there are extensive breaches of codes of practice for logging operations and logging is demonstrably unsustainable in terms of its environmental impacts. This amounts to the loss of the ‘safety net’ provided by EPBC Act to protect threatened forest-dependent species. The decision in the Federal Court highlights how deficient Australia’s environmental laws are in conserving the nation’s biodiversity, especially for forest-dependent threatened species. The ruling serves to further weaken already very weak legislation. Major reforms to the EPBC Act are urgently required.