The Wildlife Trusts, RSPB, Woodland Trust and National Trust have published a set of principles “for ensuring ‘nature markets’ truly deliver for nature, climate and people.”
With an estimated £6 billion annual funding gap for UK nature recovery across land and sea, the UK Government has set an ambitious target to grow annual private investment in nature by at least £500 million by 2027, rising to over £1 billion by 2030. It published its Nature Markets Framework in May and is working with the British Standards Institute to develop robust standards for green financing.
Nature markets are based on the sale of environmental ‘credits’ such as carbon credits, biodiversity units, nutrient credits, and natural flood management payments. They are generated by nature-based solutions that have the capacity to deliver multiple benefits for society and the environment, as well as opening up new income streams for rural communities and farmers.
The current lack of regulation for these emerging markets has led to concerns that poor quality or low ambition schemes could create a ‘wild west’ that allows certain industries or businesses to greenwash, while also missing out on opportunities to maximise benefits for nature and people.
The Wildlife Trusts, RSPB, Woodland Trust and National Trust have worked with Finance Earth and Federated Hermes – a global leader in responsible investment management – to co-develop Nature Markets Principles, a set of voluntary principles for science-based investment, to support high integrity natural capital markets in the UK.
Finance Earth, in partnership with Federated Hermes, will manage the Government-backed UK Nature Impact Fund that aims to stimulate institutional investment at scale in high quality nature restoration projects across the UK. The UK Nature Impact Fund intends to adopt the Nature Markets Principles and apply them across all its activities in UK nature markets.
James Alexander, Chair of Finance Earth, said: “These principles have been co-developed as a stop-gap to influence market practice today and to contribute to the much needed emerging Government policy and regulation. The Nature Markets Principles have been informed by a range of credible UK and international sources, as well as the practical delivery experience of the UK’s leading nature charities whose aim is to support the development and long-term operation of high-integrity, high quality and high impact UK markets for nature restoration and enhancement.
“Enshrined in the principles are the need for projects to be science-based, transparent and verifiable, ideally in perpetuity and benefiting local communities as well as society more broadly. There are also stipulations about who the producers of the credits will do business with, ruling out those companies dependent on environmentally damaging activities such as fossil fuel extraction.”
Dr Rob Stoneman, Director of Landscape Recovery at The Wildlife Trusts, says:
“Nature-based credit schemes present a real opportunity to restore nature and create regeneration and prosperity in the countryside – if done in the right way.
“These principles send a firm message from some of the UK’s top deliverers of nature-based solutions that we will only engage with the highest integrity schemes. Buyers must stand up to scrutiny and truly contribute to nature’s recovery in the UK, while benefiting local communities. We welcome the business community and others working in this space to join us in upholding these principles.”
Rebecca Munro, Director of Income and Conservation Investment at RSPB, says:
“We are in the middle of a nature and climate crisis, but we know that businesses want to have a greater role in being part of the solution. Well-regulated nature markets could be one way that we help grow business investment in restoring nature and responding to climate change, all whilst benefiting local communities.”
Alistair Maltby, Director of Estate and Woodland Outreach at the Woodland Trust, says:
“Everyone involved in nature conservation is alive to the risk of greenwash. The nature market principles are an important step in tackling this. They ensure only projects which genuinely contribute to nature’s recovery are included, and only those businesses with a clear commitment to that objective can invest. The principles set out the foundations for a high integrity market and we want them to be adopted as widely as possible, to help to deliver the funding that is urgently needed to assist nature’s recovery.”
Patrick Begg, Outdoors & Natural Resources Director at the National Trust, says:
“It should be everyone’s business to help restore nature. Which is why we are so supportive of unlocking ways for the corporate sector and investors to play their part. And now that we know just how important nature is in underpinning so much of our daily lives and our economy, it makes complete sense to find new ways to crowd in the necessary investment to restore and protect it long term.
“These principles set out the framework needed to make sure that any investments are powerful and impactful. Our aim is that they not only create real and sustained outcomes for nature, but also that they provide business and investors with the level playing field and consistency they will need to invest long term, at scale and with confidence.”
Eoin Murray, Head of Investment at Federated Hermes Limited, says:
“Science-based investment in nature-based solutions not only offers opportunities to create value to investors but it is crucial for addressing climate change, promoting green growth, and enhancing wellbeing. We are therefore pleased to have collaborated with the UK’s largest nature charities on the creation of the Nature Markets Principles and believe this cross-sector partnership presents an exciting opportunity to contribute toward a paradigm shift in conservation financing. This approach acknowledges the complexity of the social and ecological systems it invests into and the Principles lay the groundwork for significant institutional investment in high-integrity nature restoration.”
A downloadable PDF copy of the full Nature Markets Principles can be found here.