A priority of enabling trading

Nature finance is often perceived to be about access to private capital for improvements in the condition of the natural environment.

When government and the third sector use the word ‘investment’ in relation to the natural environment, they often do so with a very different meaning to those who own or manage financial assets. This Review shows that the focus of the current project pipeline is on nature markets, the trading of ecosystem service credits. Genuine financial investment (the deployment of financial assets in the pursuit of monetary returns or other direct benefit) is being sought in only a minority of cases. This situation may change if (or when) more private landowners seek to participate in nature markets. Should there be robust mechanisms to aggregate the value that nature finance projects can offer to businesses (including financial services organisations), then it may be the case that there is more opportunity for genuine investment.

Economic analysis carried out in 2021 estimated that £44 billion to £97 billion above current public sector commitments is required for the UK to meet naturerelated outcomes through to 2031. While the project pipeline characterised in this Review is aspiring and enterprising, the combined expectations of revenue and repayable finance for nature finance projects do not come remotely close to meeting this gap. The focus should now be on scaling-up the nature finance projects that have been most successful from an environmental and social point of view. Initiatives such as Wilder Carbon1 are well-placed to help with this, because they have professional brand identity and have established safeguards for the integrity of both buyers and sellers in nature markets.