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The action or process of officially recognising someone or something as having a particular status or being qualified to perform a particular activity.
For carbon, biodiversity or other credits, accreditation is used to verify that the credit delivers the promised outcome. For example, the Verified Carbon Standard operated by Verra is, as of March 2023, the largest GHG (Green House Gas) accreditation programme in the world. It characterises accreditation as providing real, measurable, additional, permanent, independently verified, conservatively estimated, uniquely numbered, and transparently listed verification.
In finance, accreditation verifies whether the project or investment intermediary is capable of strong financial management and of safeguarding funded projects and programmes.



A real increase in social or environmental value that would not have occurred in the absence of the intervention being carried out. This is essential for environmental markets, where buyers will want to know that any purchase will deliver over and above what would otherwise have happened without this finance. The Woodland Carbon Code outline two tests for additionality. Here, the legal test checks whether the woodland creation is not already required.


The process of converting land with no previous tree cover into forest.


The incorporation of trees into agricultural land. This can include Silvoarable systems which incorporate crops and trees or Silvopastoral systems which incorporate Livestock and trees.

Artificial Wetland

A constructed wetland designated for land reclamation or as mitigation for natural areas.



A measurement of the ecosystem services (for example biodiversity) provided by an area of land or water, in its initial condition, before a nature recovery project or new management practices are implemented.  Baselines are used to measure improvements over time – often to prove additionality in order to generate units for sale.


Any individual or organisation who gains an advantage (monetary or non-monetary) from something. Beneficiaries of the ecosystem services provided by natural capital on your land may be willing to pay for those services through nature markets. For instance, a local authority downstream from you may be willing to pay you to incorporate Natural Flood Management interventions on your land as they would benefit from decreased flood risk.


Bioacoustics is the scientific study of the sounds produced by living organisms, particularly animals. Bioacoustics can be used in measuring and monitoring biodiversity through the use of recording devices to monitor the number and type of species in a landscape

Biodiversity credits

A common unit used for Biodiversity Offsetting. Biodiversity credits are a mechanism that allows individuals and companies to invest in environmental projects that contribute to a richer biodiversity. A credit itself is a legal document, analog or digital, describing where the environmental action has taken place, who has developed it, according to what methodologies, and that it has been certified according to a certain system. Biodiversity credits may be transacted after issuance.

Biodiversity Metric

An evidence-based tool to assess the biodiversity value of a site or habitat. Can incorporate a habitat’s size, distinctiveness, diversity or rarity of the habitat and species found, the strategic significance of a site and its ecological importance locally, the condition and quality of the habitat, the connectivity of the site and how the habitat is connected to other areas, and the local importance of the habitat site. For example, Defra’s Biodiversity Metric for the Biodiversity Net Gain legislation in England.

Biodiversity Net Gain

Biodiversity net gain (BNG) is an approach to development, and/or land management which mandates developers to deliver measurable improvements for biodiversity by creating or enhancing habitats in association with development. Biodiversity net gain can be achieved on-site, off-site or through a combination of on-site and off-site measures. In England, Mandatory BNG, requiring a 10% net gain in biodiversity, will apply to most developments from November 2023, unless exempt. It will apply to small sites from April 2024.

Biodiversity offset

Compensation payments for the restoration, improvement or creation of new habitats areas linked to losses elsewhere.

Biodiversity Unit (BU)

A unit of biodiversity, calculated by a qualified ecologist using a biodiversity impact assessment tool, for example Defra’s Biodiversity Metric. This forms part of the mandatory market for Biodiversity Net Gain (BNG) in England, and differs to ‘biodiversity credits’ which will form part of voluntary biodiversity markets.

Blended finance

other. Thereby, blended finance provides flexible funds to facilitate project development and reduce the risk of investment, thereby encouraging capital and knowledge flow from more risk-averse investors to develop the market. the strategic use of development finance and philanthropic funds to mobilize private capital flows to emerging and frontier markets.


Fixed income investment in which an investor loans money to an entity (typically corporate or governmental) which borrows the funds for a defined period at a variable or fixed interest rate. A type of ‘debt’ (see definition).

Buffer pool

A pool of carbon credits contributed to by all projects for the replacement of unintended release of CO2, to mitigate the risk of non-permanence.


When a suite of ecosystem services produced by the same activity (for example the biodiversity and water quality improvement provided by wetland restoration) is sold as a single combined unit in the market. For example, the owner of a wetland habitat receives a single payment for its restoration that accounts for the multiple benefits delivered including biodiversity net gain, natural flood management and carbon sequestration.


Buyers are typically businesses that either directly benefit from the environmental improvements made through the nature market project, or that are required to pay for improvements to compensate for their own activities. Buyers can be motivated on a voluntary basis, or to meet a regulatory requirement.

Blended Finance

Blended finance refers to the use of a combination of public and private sector funds to finance projects or initiatives which aim to achieve both financial returns and positive social or environmental outcomes. This approach involves blending concessional capital from public or philanthropic sources with commercial capital from private investors.


Carbon codes 

Agreed ways of working that are designed to provide reassurance to buyers of carbon credits that what they are paying for is reliable and conforms to best practice. See Woodland Carbon Code or Peatland Carbon Code.

Carbon credits 

A carbon credit represents either the permanent removal of a tonne of carbon dioxide equivalent (CO2e) from the atmosphere, or the avoidance of one tonne of CO2e being emitted in the first place. (Carbon dioxide equivalents is a way of expressing the combined effect of different greenhouse gases in one measure.) An example of natural emissions avoidance is the restoration of peatlands, which release large volumes of greenhouse gases when they are in a degraded state. The UK is one of only a few parts of the world with domestic carbon standards in place for woodland creation and peatland restoration that create verified credits that give assurance to buyers.

Carbon market 

A market created from the trading of carbon emission allowances to encourage or help countries and companies to limit their carbon emissions, also known as ‘carbon trading’.

Carbon trading 

The trading of carbon credits

Catchment-based approach

An inclusive, civil society-led initiative that works in partnership with Government, Local Authorities, Water Companies, businesses and others, to maximise the natural value of river catchments. It is embedded collaborative working at a river catchment scale, delivering a range of environmental, social and economic benefits and protecting water environments for the benefit of the whole of society.

Citizen Science

Citizen Science is research conducted with participation from the general public, or amateur/nonprofessional researchers.

Climate adaption 

The process of adjusting to the actual or expected effects of climate change.

Climate finance 

A type of ‘sustainable finance’ focused on financing activities which aid in mitigation and/or adaptation to climate change

Climate mitigation

Actions that reduce the rate of climate change, either through prevention of the emission of greenhouse gases to the atmosphere, or the removal of those gases from the atmosphere.

Community Interest Company

A type of limited company that trades with a social purpose, or carries out other activities for the benefit of a community. CICs are intended to use their assets, income and profits for the benefit of the community that they are formed to serve. They therefore have a number of additional features compared to a traditional limited company, including being subject to an ‘asset lock’ that ensures assets are retained within the company to support its activities or otherwise used to benefit the community.

Corporate Social Responsibility (CSR)

Corporate Social Responsibility (CSR) is a business approach that involves companies acknowledging and taking responsibility for their impact on society and the environment. It goes beyond fulfilling legal obligations and includes actively seeking ways to contribute to the well-being of communities and minimise negative environmental effects. For example, a food retailer might introduce initiatives which promote environmental sustainability and community well being through offering support to farmers to introduce sustainable practices or through partnering with local schools to promote healthy eating habits.

Compliance market 

A market in which buyers purchase units of an ecosystem service in order to meet regulatory requirements, for example of deliver biodiversity net gain.

Concessionary loan

Funds borrowed with an expectation of capital repayment and an interest payment at a reduced rate or with preferential terms such as a grace period.

Conservation covenants 

A legal commitment to conserve the land that stays with the land, even if the person who made the commitment sells the land. These ensure long-term security of the assets invested in.

Conservation tillage

Conservation tillage is an agricultural management approach that aims to minimize the frequency or intensity of tillage operations in an effort to promote certain economic and environmental benefits.

Countryside Stewardship Scheme (CS) 

A UK Government grant scheme, for applicants in England, which offers a range of capital and revenue grants providing financial incentives for farmers, foresters and land managers to look after and improve the environment, including through increasing biodiversity, improving habitat, expanding woodland areas, improving water quality, improving air quality and improving natural flood management. Compared to the incoming Sustainable Farming Incentive (SFI) scheme, a CS Grant will pay for more targeted actions relating to specific locations, features and habitats. The UK Department for Environment, Food and Rural Affairs (Defra) intends to replace the scheme with its Local Nature Recovery Scheme (LNRS) in the future, to form part of a national Nature Recovery Network (NRN).


The rate of interest payable to investors periodically over the life of a bond. Can be expressed in either percentage or currency amounts. Can be fixed or variable, i.e. adjusted periodically by reference to a spread over a set benchmark.

Credit (unit) 

A quantified amount of an ecosystem service, for example a tonne of carbon or a defined amount of biodiversity, that can be sold in the market. Often used interchangeably with ‘Unit’.



An obligation to make a future re-payment in exchange for an upfront investment. Investors expect repayment of their investment and may require some interest (or coupons). Bonds are a form of debt finance. This is a different form of financing from ‘Equity’ (see definition). Green bonds are an example of such lending, the proceeds of which are used to generate specific environmental gains. Green mortgages – whereby households investing in energy or other efficiency improvements can get lower mortgages – are also a form of debt financing (Demystifying Green Finance report).

Due diligence

Conducting an appraisal of a business or activity to evaluate its commercial potential and financial, environmental or societal risk.


Ecosystems Services 

The direct and indirect contributions of the natural environment to people’s wellbeing.

Ecosystem Resilience

The ability of an ecosystem to continue functioning amid and recover from a disturbance.


Responsible tourism that takes place as a result of biological or geological interest and which involves conservation of the environment.

ELMS (the Environmental Land Management Scheme)

The UK government’s post-Brexit farm payments system, available to landowners in England only. It replaces the EU Common Agricultural Policy and is made up of three separate schemes – the Sustainable Farming Incentive the Local Nature Recovery Scheme and the Landscape Recovery Scheme).

Emissions factor 

A coefficient which allows conversion of activity data into GHG emissions. It is the average emission rate of a given source, relative to units of activity or process/processes.

Environmental DNA (eDNA)

DNA that is collected from a variety of environmental samples such as soil, seawater, snow or air, rather than directly sampled from an individual organism. eDNA can be used to detect and measure species in an environment and has been used in the context of nature markets to baseline and monitor biodiversity,

Environmental markets

Otherwise known as nature markets, environmental markets describe the sale and purchase of environmental improvements (often called ecosystem services) that are measurable, such as:

  • carbon sequestered or emissions avoided through improvements made to soil or habitats
  • improved water quality by decreasing nitrogen or phosphate run-off
  • improved biodiversity through restored and connected habitats
  • reduced flood risk through riparian planting, river re-meandering, earth bunds and such


Funds provided in exchange for ownership interest (i.e. a share of ownership) and a share of profits based on project performance and level of risk taken.

ESG (Environmental, Social and Governance) factors

Environmental, Social and Governance risks / criteria used to report / assess a company’s operations. Environmental criteria consider how a company performs as a steward of nature. Social criteria examine how it manages relationships with employees, suppliers, customers, and the communities where it operates. Governance deals with a company’s leadership, executive pay, audits, internal controls, and shareholder rights.

Ex-ante credit/unit

Expected carbon/biodiversity unit or credit calculated ahead of habitat restoration.

Exclusivity agreement 

Agreement between prospective purchaser and vendor confirming that the vendor will not seek other potential purchasers for an agreed period.


Fixed charge 

In a bank loan, security over a specified non-current asset (such as a building or machine).

Floating charge

In a bank loan, security over a specified class of current assets (such as trade receivables or inventory).



The systems, processes and structures which control how an organisation or partnership operates. Governance provides a framework for how decisions are made, who has authority and who is accountable.


Transfers made in cash, goods or services for which no repayment is required, meaning no risk and no return for investors.

Green bond 

Any type of bond instrument where the proceeds will be exclusively applied to finance or re-finance, in part or in full, new and/or existing eligible green projects.


Greenwashing means making a false impression that a company’s products, services or practices are environmentally sound. This involves making unsubstantiated or misleading claims to convince customers and the broader public that products are ‘environmentally friendly’.

Grey infrastructure 

Human-engineered infrastructure for water resources such as water and wastewater treatment plants, pipelines, and reservoirs.


Habitat bank

A parcel of land that has been set aside to generate an uplift in biodiversity, for which credits are ‘banked’ and can then be sold via nature markets. For example, by generating Biodiversity Units which can be sold to developers who need to demonstrate a Biodiversity Net Gain via planning legislation (where the developer is unable to integrate a net gain on-site and so may choose to offset locally via a habitat bank).


Integrity is a key concept in nature markets as land managers, corporates, government and financial institutions aim to ensure that the environmental benefits being delivered through nature market deals substantially contribute to environmental goals while limiting any potential harm to environment and community. In the UK, some key principles for nature markets have been developed to ensure these markets and the environmental benefits they deliver are high integrity. These principles are:

  • Science-based Nature Recovery
  • Environmental and Social Safeguarding
  • Additionality
  • Permanence and Financial Prudence
  • Seeking co-benefits
  • Verifiability
  • Transparency.


You can read more about these principles here.


Impact Investing

Investments made with the intention of generating positive, measurable social and environmental impact alongside a financial return.


Insetting is where organisations or projects offset harm caused by their own operations (e.g. greenhouse gas emissions or biodiversity loss) through interventions in their own value chains.  This could be done through a nature-based solution, for example the creation of habitat banks or tree planting on sites within the organisation’s ownership.  Also see Offsetting definition.


Investors provide repayable finance to help meet up-front costs, like the habitat creation works. Investors are different to buyers as the financing they offer up front is then repaid with interest.

Institutional investor 

A financial institution that invests on a professional basis. Often manages collective funds, e.g. pension funds, insurance companies or unit trusts. Examples of institutional investors in the UK can be found here.


The entity (individual, company or other organisation) in which an investment is made.


An investment is an asset or item acquired with the goal of generating income or appreciation. Appreciation refers to an increase in the value of an asset over time.

Investment Readiness

Investment readiness is the extent to which an investee is perceived to possess the attributes which make them an investible proposition by an appropriate investor. Investment readiness programmes, or activities, seek to increase the pool of investable businesses, usually providing entrepreneurs with a better understanding of the role of different sources of finance in business development and providing support and development for the company’s business plan and the presentation of it.


A provider of repayable capital funding.


Just Transition

A Just Transition refers to a transition to a low emission, nature positive economy which is equitable and fair. It involves ensuring that workers and communities affected by the transition are not left behind, and that the shift promotes social justice.


Key Performance Indicators (KPIs)

Key Performance Indicators are the key quantifiable indicators of progress towards an intended result. Investors in natural capital may have specific KPIs against which they measure success against environmental outcomes. Some examples of KPIs you might encounter through nature markets are:

  • tonnes of carbon sequestered in soils
  • tonnes of CO2e emissions
  • % change in species abundance


Landscape Recovery Scheme

One of three environmental schemes, for applicants in England, being introduced under the UK Government’s post Brexit ‘Agricultural Transition Plan’ (the other two being the Sustainable Farming Incentive and the Local Nature Recovery Scheme). The Landscape Recovery Scheme offers funding for bespoke, longer-term, larger scale projects to enhance the natural environment. The majority of projects involve groups of land managers and farmers, including tenants, working together to deliver a range of environmental benefits across farmland and rural landscapes.


The term refers to how interventions aimed at reducing environmental pressures at one site may be locally successful, but increase pressures elsewhere


A memorandum of understanding, or MOU, is an agreement between two or more parties which signals the intent of doing business together or coming to an agreement. An MoU is often the starting point of negotiations which will ultimately result in a legal agreement.

Although an MoU is a formal document it is not legally binding. It simply shows the willingness of each involved party to take action to move the contract forward.


The act of limiting, as far as possible, or addressing the negative impacts of a particular activity. For instance, used in the context of ‘mitigating’ carbon emissions, nutrient pollution or biodiversity loss.


Natural Capital 

The habitats and ecosystems that provide social, environmental and economic benefits to people. Those benefits are termed ‘ecosystem services’.

Natural Capital Accounting

The measuring and quantifying of environmental assets and services, i.e. the habitats and ecosystems that provide social, environmental and economic benefits to people. Accounts are of two types:

  • physical accounts – classify and record measures of extent, condition and annual service flow
  • monetary accounts – assign a monetary valuation to selected services on an annual basis and record an overall valuation of the natural asset’s ability to generate future flows of services.

Natural Capital Accounting is used to monitor losses and gains in natural capital over time and inform investment, resourcing and management decisions.

Natural Flood Management 

The intentional use of natural features such as vegetation or landform to slow the flow of water from land in order to reduce flood risk.

Nature market 

Nature markets, otherwise known as environmental markets are the sale and purchase of environmental improvements (often called ecosystem services) that are measurable, such as:

  • carbon sequestered or emissions avoided through improvements made to soil or habitats
  • improved water quality by decreasing nitrogen or phosphate run-off
  • improved biodiversity through restored and connected habitats
  • reduced flood risk through riparian planting, river re-meandering, earth bunds and such

Nature Positive 

The term used to describe a world where nature – species and ecosystems – is being restored and is regenerating rather than declining. Governments and organisations around the world have signed up to the ‘Leaders Pledge for Nature’ which includes a commitment to nature positivity.

Nature-based solutions 

Techniques that involve using nature as part of the solution to environmental issues such as to mitigate or adapt to climate change, to manage flood and coastal erosion risk, to provide healthy, social and liveable cities or improved water quality.


The Natural Environment Investment Readiness Fund – A grant scheme run by the Environment Agency for projects in England which improve the natural environment, have the ability to produce revenue streams from ecosystem services and can produce an investment model that can be scaled and reproduced. It provides grants of £10,000-100,000. It aims ‘to stimulate private investment and market based mechanisms that improve and safeguard our domestic natural environment by helping projects get ready for investment’.

Net Gain 

Achievement of net improvement in environmental outcomes arising from the approval of development projects. A principle used in the Biodiversity Net Gain legislation in England.

Net Zero

The situation in which the greenhouse gases emissions attributable to a country, a locality, a group of people, or an organisation, are balanced by the permanent removal of an equivalent amount from the atmosphere.

Nitrate mitigation 

Actions taken to offset the nitrate output from a new development. This could be addressed either through an on-site obligation to include treatment works within the development, undertaking nature-based work, e.g. habitat creation, on (a) local site(s) or purchasing credits in a nutrient mitigation market.

Nutrient load 

The total amount of a nutrient such as nitrogen or phosphorus entering the water during a given time, such as that which has leached through the soil via surface water run-off.

Nutrient neutrality 

A policy devised by Natural England to mitigate additional nutrient pollution from new developments. The development achieves nutrient neutrality when the nutrient load created through additional wastewater (including surface water) from the development is mitigated. Suitable mitigation measures might include constructed wetlands, changes in land management or retrofitting Sustainable Urban Drainage systems within the catchment of the impacted site(s). By designing development alongside suitable mitigation measures, additional nutrient loads can often be avoided or mitigated. Where neutrality measures are needed, the purpose of these mitigation measures is to avoid impacts to the designated sites, rather than compensate for the impacts once they have occurred.

Nutrient retention

Nutrient retention capacity refers to the capacity of the substrate or habitat, such as soil in grasslands or wetlands, to retain added nutrients against losses caused by leaching.

Nutrient trading 

The sale and purchase of nutrient reduction credits in order to meet the local and regional water quality goals. These credits are typically actions that reduce nutrient loss from farmland, such as the placement of vegetation to protect water courses or the planting of cover crops. Usually represent 1kg/annum of total nitrogen and/or phosphorus reduction.



An environmental offset is an environmental improvement which compensates for environmental harm elsewhere. For instance, a carbon offset represents a portion of carbon taken out of the atmosphere (e.g. through tree planting or improving soil health) – that is used to compensate for emissions that occur elsewhere.

Option Period

An option period is a negotiated number of days after a contract is fully executed during which time the buyer can terminate the contract for any reason and get his/her money back.

Outcomes payments 

Payments made to the investor who has provided upfront investment in a project, with payments dependent on the project meeting pre-agreed environmental outcomes.

Outcomes-based environmental regulation 

Regulation that sets outcome-based targets.  This allows companies to choose the solutions that deliver the biggest environmental benefits (across a range of dimensions) at the lowest costs, rather that prescribing specific actions.


Parametric Insurance 

Parametric (or index based) solutions are types of insurance that cover the probability of a predefined event happening instead of indemnifying actual loss incurred. It is an agreement to make a payment upon the occurrence of a triggering event, e.g. an earthquake of a particular defined magnitude or a certain level of rainfall, and as such is detached of an underlying physical asset or piece of infrastructure.

Patient equity/investment 

Equity or investments held by investors with a long-term perspective, whereby they are willing to forgo maximum short-term returns in favour of longer-term returns.

Payment for Ecosystem Services

Schemes through which the beneficiaries, or users, of ecosystem services provide payment to the stewards, or providers of those services

Peatland Carbon Unit

A tonne of carbon dioxide equivalent (CO2e), which includes carbon dioxide, methane, nitrous oxide and aquatic carbon, of which the emission was avoided by a Peatland Code-verified peatland restoration project. It has been independently verified, which means that this emission reduction is guaranteed to have happened and can be used by companies to report against UK-based emissions or to use in claims of carbon neutrality or Net Zero emissions.

Peatland Code 

A voluntary certification standard for UK peatland projects wishing to market the climate benefits of peatland restoration and provides assurances to voluntary carbon credit buyers that the climate benefits being sold are real, quantifiable, additional and permanent

Pending Issuance Unit (PIU)

A unit that represents a contractual right to an anticipated delivery of an emission reduction offset. It is effectively a ‘promise to deliver’ a Carbon Unit in the future, based on predicted emission reductions. It is not ‘guaranteed’ and cannot be used to report against UK-based emissions until verified.


In nature markets, permanence refers to the longevity and stability of the environmental improvement which is ultimately being sold.  In nature market projects, there always exists the possibility of a reversal of  benefits from either natural disturbances (e.g., fires, disease, pests, and unusual weather events), or from the lack of reliable guarantees that the original land use activities will not return after the project concludes.  In aiming for permanence, projects should aim, as far as possible to mitigate against these risks.

Perverse Incentive

A perverse incentive is a reward or system that unintentionally encourages behaviour contrary to the intended goal. In the context of farming, a perverse incentive could be a government subsidy that leads to the overuse of a particular pesticide, potentially causing environmental harm.

Phosphate mitigation

Actions taken to offset the phosphate output from a new developments. This could be addressed either through an on-site obligation to include treatment works within the development, undertaking nature-based work, e.g. habitat creation, on (a) local site(s) or purchasing credits in a nutrient mitigation market. Actions taken to offset the phosphate output from a new developments. This could be addressed either through an on-site obligation to include treatment works within the development, undertaking nature-based work, e.g. habitat creation, on (a) local site(s) or purchasing credits in a nutrient mitigation market.

Place-based investment 

An investment practice that aims to yield financial, social, and environmental returns that address the needs of specific places and specific populations to enhance local economic resilience, shared prosperity, and sustainable development.

Project Developer 

Individuals, organisations, or businesses involved in the design and implementation of projects to support environmental restoration.

Project Finance 

Investment into the design and delivery of a specific project. Payments for Ecosystem Services (PES) could be said to fall into this category as one party pays the other for the delivery of a specific project.

Public goods 

An environmental service that benefits everyone without them paying for it.


Reduced tillage

Any method by which farmers reduce the tillage, or ploughing of the soil, compared with conventional, and often mechanised methods. It is recommended as a way to increase soil productivity and reduce soil erosion, carbon dioxide and greenhouse gas emissions, as well as reliance on farm machinery and equipment. Also see Zero Tillage and Conservation Tillage.

Regenerative agriculture 

Ways of producing food on farms that lead to progressive improvements in the condition of land, water and nature. It includes practices such as rotational grazing, mixed crop rotation, cover cropping, and integration of food production into activities such as peatland restoration and tree planting.

Repayable grant 

Funds disbursed with repayment conditional on project performance.

Responsible investment

An investment strategy that integrates ESG (Environmental, Social, and Governance) criteria into investment decisions to mitigate risk and yield long-term results. The objective of responsible investment is a financial return with consideration of ESG criteria being secondary.

Retail Investor 

Private individuals investing in a company they are not connected with. Also known as individual investors, or private client investors.  Promotion of offers to retail investors comes with a greater level of regulation than promotion to other types of investor, e.g Institutional Investors.


The money generated from business activities. Analogous to gross income.

Revenue / profit-sharing loan 

Funds borrowed with an expectation of repayment as revenues or profits are generated.

Revolving credit facility 

Facility provided by a bank to a borrower, allowing it to draw down and repay at will a loan for a specified perio


A term used to refer to the large-scale restoration of native natural habitat with a view to minimal management input by people. The term is sometimes used in reference to the re-establishment of populations of animal and plant species that are considered by some nature conservationists to be representative of ‘optimal’ ecological condition.

Riparian buffer 

A riparian buffer or stream buffer is a vegetated area (a “buffer strip”) near a stream usually forested, which helps shade and partially protect the stream from the impact of adjacent land uses. It plays a key role in increasing water quality in associated streams, rivers and lakes.

Risk reduction mechanism 

For example, a project guarantees to ensure a certain level of investor return or first-loss capital to absorb losses. Associated with blended finance (see definition).


Science-Based Targets (SBTs)

An initiative set up by CDP, the United Nations Global Compact, World Resources Institute (WRI) and the World Wide Fund for Nature (WWF), to define and promote best practice in emissions reductions and net-zero targets in line with climate science. Also see Measurement, Reporting and Verification (MRV) (Science Based Targets).


Investments that are traded on a secondary market (a market where investors buy and sell investments they already own). The most well-known examples include stocks and bonds. Securities are readily traded and easy to price, and so are excellent indicators of the underlying value of assets.

Service Level Agreement (SLA) 

A Service Level Agreement (SLA) is a documented agreement between a service provider and a customer that identifies both the services required and the expected level of service.


The care and cultivation of woodlands (as opposed to arboriculture which is the care and cultivation of individual trees.) Also see silvo-arable and silvo-pasture.

Silvoarable system 

A system where agricultural or horticultural crops are grown simultaneously with a long-term tree crop to provide annual income from both the crops and the trees.

Silvopastoral system

A system where a long-term tree crop is grown simultaneously on land also used for grazing or forage production. Silvopastoral systems can provide an additional income stream from trees (fruit, nuts, timbre) while generating co-benefits for livestock by providing shade, protection from wind and snow and enrichment opportunities.


When multiple different ecosystem services produced by the same activities (for example biodiversity and carbon benefits of a new woodland) are sold as separate units in the market.  For example, a land manager ‘stacking’ the ecosystem services she has produced through the creation of a riparian buffer (see definition) could sell the natural flood management services to a local authority, biodiversity credits to a local company and carbon credits to a large corporate.


A person with an interest or concern in a project or outcome.


A required or agreed level of quality or attainment. Standards are the method by which environmental outcomes from nature-based projects are accredited. They are also used in carbon and biodiversity credit markets to ensure that credits deliver the outcomes promised.

Success Payments

Payments which only become due if and when a project succeeds in generating income. Similar to a ‘no-win, no-fee’ clause.


Those producing and selling units of ecosystem services on the land or coastal areas they manage, for example through nature restoration projects or sustainable land management practices.

Sustainable Farming Incentive 

One of three environmental schemes being introduced in England under the UK Government’s post Brexit ‘Agricultural Transition Plan’ (the other two being the Local Nature Recovery Scheme and the Landscape Recovery Scheme). SFI aims to help farmers manage land in a way that improves food production and is more environmentally sustainable. Farmers will be paid to provide public goods, such as improved water quality, biodiversity, climate change mitigation and animal health and welfare. In Wales, the Welsh Government plans to introduce an equivalent ‘Sustainable Farming Scheme’ (SFS) (see definition). The Scottish Government aims to set out its own reformed environmental farming subsidies and Northern Ireland plans to develop a ‘farming with nature’ scheme.

Sustainable finance 

The integration of sustainability considerations (social, environmental, economic aspects, and/or increasingly the UN Sustainable Development Goals) into investment decisions.



A quantified amount of an ecosystem service, for example a tonne of carbon or a defined amount of biodiversity, that can be sold in the market. Often used interchangeably with ‘credit’.


Validation / Verification bodies 

Qualified, independent third party auditors who are approved by the Verified Carbon Standard (VCS), the world’s most widely used greenhouse gas crediting programme, administered by Verra.  The validation process determines whether a project meets all the rules and requirements from the Verra programmes.  The verification process confirms the outcomes set out in the project documentation have been achieved.

Venture capital 

A form of private equity where investors pay for a proportion of equity in new or small businesses in order help them get started. Given the early stage of the business, it can be high risk and, therefore, investors require higher returns.

Voluntary market 

The market through which businesses, private investors, non-governmental organisations and governments can purchase ecosystem services from suppliers. Currently the ‘Voluntary Market’ generally refers to the Voluntary market for carbon offsets, by which organisations purchase carbon credits to offset their own carbon emissions. In the future however, there may be voluntary markets for biodiversity and other services provided by nature.


Zero tillage farming 

Also known as no-till farming or direct drilling, it is an agricultural technique for growing crops or pasture without disturbing the soil through tillage. No-till farming decreases the amount of soil erosion tillage causes in certain soils, especially in sandy and dry soils on sloping terrain.


Farming Toolkit Question

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