Over 300 experts have outlined a roadmap to scale up environmental markets and catalyse private investment to help fill the annual £5.6 billion financing gap for UK nature recovery.
The roadmap, included in a new report released today, sets out how to make the UK a highly attractive market for nature-based investment to help drive nature recovery.
Written by over 300 experts from various sectors, the report warns there is currently significant barriers to private investment in 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.
Reasons include systemic undervaluation of nature, a lack of tested revenue streams and standards, mis-aligned and complex environmental regulation.
Expertise and capacity gaps are also 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 experts warn, who stem from across the government, business, finance, environmental and land management sectors.
David Young, senior fellow at the Broadway Initiative, which helped spearhead the report, said: “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.”
The recommended delivery plan for UK and devolved governments focuses on three critical areas.
This includes Market Design - 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, another area, entails the development of consistent and rigorous standards for measuring and accrediting the environmental service nature-based solutions provide, as well as the improvement of data needed to ensure private investment delivers real environmental improvements.
Finally, Market Operation looks at providing 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.
Commenting on the report, the Country Land and Business Association (CLA) said the roadmap would provide the right incentives for farmers to participate in nature recovery.
“There is great potential for high-integrity environment markets to unlock private finance for nature recovery across the UK," said Sarah Hendry said, CLA director-general.
"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.”
