Initiated by the Broadway Initiative, Finance Earth and the Green Finance Institute, and developed with input from over 300 experts from across government, business, finance, the environmental and land management sectors, the Financing UK Nature Recovery Coalition’s: Recommendations and Roadmap Report has launched.
The Financing Nature Recovery UK initiative was established in November 2020 by the Broadway Initiative, Finance Earth and the Green Finance Institute, to bring experts together to address the need for private investment in nature and the development of environmental markets in the UK. Since then, we have seen data emerge from the Institute’s commissioned report from environmental economics consultancy, eftec, that shows there is £44 billion to £97 billion funding gap in the UK over the next decade to deliver our key nature goals.
Government funding and philanthropic funding alone won’t be able to deliver what is on an annual basis around £5.6 billion for nature, so we know that private finance must fill that gap. And indeed Her Majesty’s Treasury has recognised this by laying out ambitions for private investment in nature.
Currently, significant barriers to private investment exist in the UK, however. 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.
Supported by a core group of experts from organisations that include The Rivers Trust, Ecosystems Knowledge Network, Pollination, The Esmee Fairbairn Foundation, the CLA, the Scottish Wildlife Trust ,and with the input of over 300 experts form across business, finance, environmental and land management, and UK and devolved governments and government agencies, the Coalition has:
- Identified the barriers to large scale private investment in nature recovery and how these barriers can be overcome
- Established a framework to ensure the high integrity of UK environment markets so that markets work for nature and for people
- Provided recommendations and roadmap for scaling up environmental markets across the UK to move us from report to action
The Financing Nature Recovery UK report outlines a new roadmap to unlock these barriers and deliver high-integrity environmental markets that drive private investment and nature recovery across the UK. It sets out a framework to modernise regulation, leverage public expenditure and secure 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.
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. The full press release can be found here: FNRC UK – Roadmap and Recommendations Press Release.