Today sees the launch of the Financing UK Nature Recovery Coalition’s: Recommendations and Roadmap Report, developed with input from over 300 experts from across government, business, finance, the environmental and land management sectors, and endorsed by the CLA. The report sets out how to make the UK a highly attractive market for nature-based investment to help drive nature recovery.
Led by the Broadway Initiative, Finance Earth and Green Finance Institute, the report has been informed by the views and contributions from more than 50 organisations, in addition to UK and devolved governments. David Young, Senior Fellow at the Broadway Initiative, says: “We need to put nature recovery onto a sustainable financial footing. Well-designed and regulated markets can provide farmers and landowners with the incentives to integrate nature with agriculture and other land uses.”
There is an estimated annual £5.6bn finance gap for the UK’s key nature goals that public and philanthropic funding alone will not be able to meet. Yet significant barriers to private investment in nature exist in the UK. The systemic undervaluation of nature, a lack of tested revenue streams and standards, mis-aligned and complex environmental regulation, and expertise and capacity gaps are among the barriers making it difficult for the private sector to price and manage the risk of investing in nature over the long term. As a result, the risks of investment at scale currently outweigh the returns.
The recommended delivery plan for UK and devolved governments focuses on three critical areas:
● Market design: To include the need for new drivers for investment in nature recovery, such as nature-based targets, reform of existing regulations to remove barriers to private investment, and new institutional arrangements to regulate and provide independent market oversight.
● Market governance: To establish consistent and rigorous standards for measuring and accrediting the environmental service nature-based solutions provide, and the improvement of data needed to ensure private investment delivers real environmental improvements.
● Market operation: To provide the market infrastructure needed for efficient trade in environmental services, the provision of concessionary and de-risking capital, and mechanisms for local market delivery that provide opportunities for local businesses and benefits for local communities.
There is great potential for high-integrity environment markets to unlock private finance for nature recovery across the UK
Commenting on the publication of the new roadmap contained in the report, CLA Director General, Sarah Hendry, says: “There is great potential for high-integrity environment markets to unlock private finance for nature recovery across the UK. We are confident that implementing this roadmap and recommendations will provide the right incentives for farmers and other landholders to integrate nature recovery with agriculture and other land uses, and provide on-going benefits for communities across the country.”