Recommendations from over 300 experts outline a roadmap aimed at scaling up environmental markets and catalyse private investment to help fill the annual £5.6 billion financing gap for UK nature recovery.
Developed with input from over 300 experts from across government, business, finance, the environmental and land management sectors – and endorsed by organisations including the CBI, CLA, NFU, Water UK and RSPB – the Financing UK Nature Recovery Coalition’s: Recommendations and Roadmap Report launches today. The report sets out how to make the UK a highly attractive market for nature-based investment to help drive nature recovery.
According to the Green Finance Institute report, Finance Gap for UK Nature, there is an estimated annual £5.6 billion 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, according to the report.
We know that private finance must be mobilised into nature restoration and nature-based solutions if we are to meet our UK biodiversity and climate mitigation and adaptation goals.
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 report states.
The Financing Nature Recovery UK report outlines a new roadmap with an aim of unlocking these barriers and delivering “high-integrity environmental markets” that drive private investment and nature recovery across the UK.
It sets out a framework with an aim of modernising regulation, leveraging public expenditure and securing large-scale private investment in nature and biodiversity each year by 2030.
The recommended delivery plan for UK and devolved governments focuses on three critical areas:
- Market Design including 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.
Nature-based solutions
Dr Rhian-Mari Thomas, CEO, Green Finance Institute, said: “We know that private finance must be mobilised into nature restoration and nature-based solutions if we are to meet our UK biodiversity and climate mitigation and adaptation goals.
“We also know the barriers to unlock, the incentives to create and the market infrastructure that needs to be put in place to ensure this happens at pace, at scale and with high integrity. Now we need the collective effort to turn recommendations into action.”
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.
The government has set a target to raise at least £500m a year in private finance for nature’s recovery by 2027, and high integrity environmental markets will play an important role in reaching this.
The UK and devolved governments committed to working with the Financing Nature Recovery UK coalition which follows the landmark Dasgupta Review of The Economics of Biodiversity.
The Review commissioned by HM Treasury called for changes in how we think, act and measure economic success to protect and enhance our prosperity and the natural world.
Helen Whately MP, Exchequer Secretary to the Treasury, said: “The government has set a target to raise at least £500m a year in private finance for nature’s recovery by 2027, and high integrity environmental markets will play an important role in reaching this. I look forward to working with the Coalition to make these markets a reality.”
To mark the launch of the recommendations and roadmap, a public event is being held at 11:00am UK, Tuesday 7 June.
Senior representatives from across farming, finance, business and the environment will come together to discuss the roadmap and the actions needed to take it forward.
