Building market confidence in nature investment
Chief Land Use Policy Adviser Susan Twining explains how the CLA is working on behalf of members to ensure their interests are represented as nature markets are established
There are legal targets and international commitments that are driving corporates and other businesses to reduce climate and nature impacts of their activities. This has resulted in development of nature markets to allow businesses to offset their residual emissions or other environmental impacts.
In the UK, the Woodland Carbon Code (WCC) has been in operation for over 12 years as part of the voluntary carbon market. More recently the government mandated Biodiversity Net Gain (BNG) in England for developers to compensate for any biodiversity loss. New rules about nature related financial disclosures will also drive more businesses to fund nature-based project, not necessarily through formal offsetting.
But there is a problem. Establishing nature markets at scale is fiendishly complicated with a need for lots of rules and requirements to avoid false claims and greenwashing.
Defra has been very active in this area, publishing a Nature Markets Framework, that set out a range of actions for the government to support the development of functioning nature markets. One of the steps is the development of Nature Investment Standards. This is a three-year programme run by the British Standards Institute (BSI) that aims to set ‘high integrity’ requirements that will reassure buyers and sellers that the agreements are robust and reliable.
This is important for any CLA member who is considering a nature-based project for carbon sequestration, habitat creation, flood management or a mix on their land.
Support from the CLA
The CLA has recently responded to the first formal consultation on the BSI overarching principles standard.
We are broadly supportive of its development as it will support a UK marketplace and provide opportunities for landowners. However, there are areas that still need to be addressed. This includes the rules around additionality and stacking.
Additionality is a core principle that the CLA supports for offset/compensatory markets, but we have concerns about potential limitations on earning potentials for project owners if it restricts other sources of income on that land through stacking.
Similarly, we don’t want other funding that is not offset or compensatory to be devalued if they don’t meet the standards, but still deliver for nature and/or climate. The CLA also has concerns about the proportionality of principles related to community engagement and community benefits, which are very project specific. Our summary response is available to read here.
Responding to consultations is just part of our work on nature markets in both policy development and advice to members. The CLA:
- Is a member of the BSI Nature Investment Standard programme advisory group.
- Represents landowner views on policy meetings such as the Broadway Initiative nature market dialogue.
- Working on BNG implementation by having regular meetings with the Defra policy team.
- Is a member of the WCC advisory board.
For advice for your enterprise, visit our online Natural Capital hub which features everything you need to know on nature markets. This includes feedback from our Natural Capital Roadshow that ran from November 2023 through to February 2024 in partnership with Carter Jonas, and recorded an English webinar and Welsh webinar (coming soon) reflecting the different policies in each country.
We are also running a discussion on Natural Capital at the Royal Welsh Show in July so do come along and join in.
If you have views, comments, questions or experiences with nature markets then please get in touch with susan.twining@cla.org.uk.
