Science-based Markets for Nature Recovery
Lead Research Organisation:
UK CENTRE FOR ECOLOGY & HYDROLOGY
Department Name: Biodiversity (Wallingford)
Abstract
1. Our economy, livelihoods and well-being are dependent on biodiversity and associated ecosystem services. Yet, species are declining at the fastest rate recorded, driven by habitat loss, climate change, pollution, invasive species and pathogens.
2. Public and philanthropic funding have been insufficient to reverse these declines, creating a private financing gap estimated at £5.6 billion pa in the UK. Achieving meaningful nature recovery requires a complex set of science-led approaches, which is problematic for financial institutions to both understand and engage with meaningfully, or to assess the outcomes.
3. There are four barriers to developing high-integrity investment markets for nature recovery: i) high quality ecological data and models are required to provide assurance that interventions will provide benefits to nature; ii) the potential for maximising multiple benefits of interventions for nature and minimising the risk of dis-benefits needs to be reflected in investment models, allowing multiple investors in aggregated projects to invest; iii) capability to target opportunities for environmental enhancement at scale is required to maximise multiple benefits to nature and increase resilience to climate change; and iv) once nature-based investments are instigated, reliable monitoring and verification to globally agreed standards is required to determine return on investment and reduce investment risk.
4. We will develop a community of experts from the financial sector, major landowners and ecological researchers to scope the knowledge required to address these barriers to developing a science-based investment markets for nature recovery, and support the wider ambitions of Phase II of the programme.
5. We will hold facilitated user-requirements workshops bringing together a network of leading financial sector partners, major landowners and researchers to identify key knowledge gaps and co-define the capabilities of any new data and tools to enable robust and high integrity nature positive investment markets.
6. Field meetings (labs) will be held at three experimental platforms undertaking nature-based interventions: a commercial farm, and large-scale saltmarsh and peatland restoration sites. Methodologies for verifying the outcomes of management interventions will be presented and assessed in situ. Structured stakeholder interviews will quantify acceptability and confidence in these tools.
7. We will apply our collective knowledge, together with new data and tools assessed, to three client case study examples supplied by finance partners. This will enable real world testing of existing data and tools to further elucidate critical knowledge gaps. We will publish the findings as case study examples alongside lessons learned.
8. Collectively, outputs from the project will have immediately beneficial outcomes for the finance sector and potential markets for nature-positive investments. Key input into Phase II will be our co-defined user requirements, knowledge gaps and a roadmap for delivering baseline information and research.
2. Public and philanthropic funding have been insufficient to reverse these declines, creating a private financing gap estimated at £5.6 billion pa in the UK. Achieving meaningful nature recovery requires a complex set of science-led approaches, which is problematic for financial institutions to both understand and engage with meaningfully, or to assess the outcomes.
3. There are four barriers to developing high-integrity investment markets for nature recovery: i) high quality ecological data and models are required to provide assurance that interventions will provide benefits to nature; ii) the potential for maximising multiple benefits of interventions for nature and minimising the risk of dis-benefits needs to be reflected in investment models, allowing multiple investors in aggregated projects to invest; iii) capability to target opportunities for environmental enhancement at scale is required to maximise multiple benefits to nature and increase resilience to climate change; and iv) once nature-based investments are instigated, reliable monitoring and verification to globally agreed standards is required to determine return on investment and reduce investment risk.
4. We will develop a community of experts from the financial sector, major landowners and ecological researchers to scope the knowledge required to address these barriers to developing a science-based investment markets for nature recovery, and support the wider ambitions of Phase II of the programme.
5. We will hold facilitated user-requirements workshops bringing together a network of leading financial sector partners, major landowners and researchers to identify key knowledge gaps and co-define the capabilities of any new data and tools to enable robust and high integrity nature positive investment markets.
6. Field meetings (labs) will be held at three experimental platforms undertaking nature-based interventions: a commercial farm, and large-scale saltmarsh and peatland restoration sites. Methodologies for verifying the outcomes of management interventions will be presented and assessed in situ. Structured stakeholder interviews will quantify acceptability and confidence in these tools.
7. We will apply our collective knowledge, together with new data and tools assessed, to three client case study examples supplied by finance partners. This will enable real world testing of existing data and tools to further elucidate critical knowledge gaps. We will publish the findings as case study examples alongside lessons learned.
8. Collectively, outputs from the project will have immediately beneficial outcomes for the finance sector and potential markets for nature-positive investments. Key input into Phase II will be our co-defined user requirements, knowledge gaps and a roadmap for delivering baseline information and research.
Description | We have achieved the following in this one year project: 1. Undertaken three case studies with finance sector stakeholders to understand their requirements for monitoring reporting and verification of impacts and benefits on biodiversity; 2. Demonstrated and confirmed the value of UKCEH autonomous biodiversity monitoring systems and environmental decision support tools to the green finance investment; 3. Developed a strategic partnership with a capital investment company to commercialise these systems, tools and capabilities; and 4. Won funding with this partnership from DSIT to develop this commercial offering. |
Exploitation Route | Greensphere Capital LLP are working with UKCEH on a private finance investment case to develop the autonomous biodiversity monitoring systems and environmental decision support tools piloted in this project. |
Sectors | Environment Financial Services and Management Consultancy |
URL | https://www.ceh.ac.uk/news-and-media/news/partnership-will-provide-investment-solutions-climate-and-biodiversity-crises |
Description | The Science Based Markets for Nature Recovery Project has raised awareness of the high integrity data, models, monitoring technologies and tools available to the finance sector for monitoring impacts and benefits to biodiversity. In particular, this project has had a positive influence on the Task Force for Nature Disclosures (TNFD) framework for action and reporting with our project tools now listed on the TNFD website. This new knowledge and awareness of should encourage landowners and investors to participate in financial markets for interventions that offset environmental impacts and drive nature recovery. |
First Year Of Impact | 2024 |
Sector | Environment,Financial Services, and Management Consultancy,Transport |
Impact Types | Societal Economic Policy & public services |
Description | Integrating Finance and Biodiversity for a Nature Positive Future |
Amount | £3,021,258 (GBP) |
Funding ID | NE/Z503368/1 |
Organisation | Natural Environment Research Council |
Sector | Public |
Country | United Kingdom |
Start | 01/2024 |
End | 04/2026 |
Description | Biodiversity & Water Quality Uses Cases |
Organisation | Severn Trent Water |
Country | United Kingdom |
Sector | Private |
PI Contribution | Showcase of environmental data and modelling approaches to support Green Finance requirements. Identification of ways to use data to meet specific requirements of case study partners. Development of workflows to translate data into required outputs and metrics (e.g. collation of natural capital baseline data, development of environmental management scenarios and modelling of environmental impacts). Co-development of refinements to workflow and presentation of outputs. Examples only. |
Collaborator Contribution | Identification of key requirements for Green Finance case study. Outreach to investors / identification of case study partner. |
Impact | Detailed question and response documentation shared between UKCEH and RLAM outlining status quo of water companies reporting on biodiversity and potential requirements / gaps. Future collaboration with Severn Trent (meetings arranged) to gather baseline data > develop metrics > case study > final outputs. |
Start Year | 2023 |
Description | Upland Land Management Case Study |
Organisation | Eftec |
Country | United Kingdom |
Sector | Private |
PI Contribution | Showcase of environmental data and modelling approaches to support Green Finance requirements. Identification of ways to use data to meet specific requirements of case study partners. Development of workflows to translate data into required outputs and metrics (e.g. collation of natural capital baseline data, development of environmental management scenarios and modelling of environmental impacts). Co-development of refinements to workflow and presentation of outputs. |
Collaborator Contribution | Identification of key requirements for Green Finance case study. Identification of case study landscapes and sourcing of land management data - e.g. farm boundaries, farm management data, plausible management change scenarios (% change in woodland, area out of production). Co-development of refinements to workflow and presentation of outputs. |
Impact | Development of core natural capital data collation scripts. Integration of environmental data into farm management plans. |
Start Year | 2023 |
Description | Chichester Harbour Field Visit |
Form Of Engagement Activity | Participation in an activity, workshop or similar |
Part Of Official Scheme? | No |
Geographic Reach | National |
Primary Audience | Industry/Business |
Results and Impact | Purpose: To showcase new ways of planning and verifying this type of activity - designed primarily for the benefit of financial services professionals and corporate buyers of nature-based services. Outcome: Shaping of future events - significant proportion of presentations and/or demonstrations to be held on site in the habitat in question and identified most useful topics. Impact: Participants indicated that they would be interested in attending a future field visit. Over half of survey participants reported that the event was 'very useful' and 'would drive forward nature positive investments in their organisation.' |
Year(s) Of Engagement Activity | 2023 |
Description | East Hendred Estate Field Meeting |
Form Of Engagement Activity | Participation in an activity, workshop or similar |
Part Of Official Scheme? | No |
Geographic Reach | National |
Primary Audience | Industry/Business |
Results and Impact | Purpose: Field visit to demonstrate new methodologies for planning and verifying nature positive investments for financial services professionals and corporate buyers of ecosystem services. Outcomes: All survey participants stated that they would be interested, given transport and time constraints, in attending a future field trip demonstrating peatland restoration in the Fens in a nature-positive investment context. Impact: Over half of the survey participants reported that the event was 'very useful' and 'would drive forward nature positive investments in their organisation.' |
Year(s) Of Engagement Activity | 2023 |
Description | NERC Joint Integrating Finance and Biodiversity and Economics of Biodiversity Conference |
Form Of Engagement Activity | Participation in an activity, workshop or similar |
Part Of Official Scheme? | No |
Geographic Reach | International |
Primary Audience | Study participants or study members |
Results and Impact | Purpose: presentation and discussion of findings from phase I of the IFB programme (UKCEH Project presentation); discussion of the aims of the IFB programme overall including Phase II (Themes and Flagships) and fit with Innovate UK funding (Nick Wells), planning of collaborative activities for Phase II of the IFB programme; planning of collaborative activities with the aligned Economics f Biodiversity (EoB) programme. Impact: Greater collaboration across the IFB and EoB programmes. |
Year(s) Of Engagement Activity | 2024 |
Description | NERC Nature Positive Business Roundtable |
Form Of Engagement Activity | Participation in an activity, workshop or similar |
Part Of Official Scheme? | No |
Geographic Reach | National |
Primary Audience | Industry/Business |
Results and Impact | The PI for Science-based Markets for Nature Recovery attended a NERC-convened roundtable of industry and environmental science leaders, to be held in Caxton House, London, on Thursday 11th January 2024. The workshop brought together key leaders in this area to help understand the challenges facing businesses in the construction and infrastructure sectors as they seek to conserve and enhance biodiversity through their activities. Invitees included Network Rail, HS2, National Trust, Task Farce for Nature Disclosures, and Food Matters International. The workshop will help NERC identify opportunities where new investment is required into pre-competitive, business-informed R&D that could make a step change in enabling businesses to achieve their ambitions for clean growth and environmental sustainability. |
Year(s) Of Engagement Activity | 2024 |
Description | Science-based Markets for Nature Recovery Land Management Stakeholder Workshop |
Form Of Engagement Activity | Participation in an activity, workshop or similar |
Part Of Official Scheme? | No |
Geographic Reach | National |
Primary Audience | Industry/Business |
Results and Impact | A small workshop was held at BNP Parabas attended by Strutt & Parker, EFTEC and UKCEH to discuss the requirements of the estate and land management sector for high integrity data, models and tools to support land management decision making and green finance investment. The outcome of this workshop was to shape one of the case studies undertaken by the project. |
Year(s) Of Engagement Activity | 2023 |
Description | Stakeholder Workshop to Co-design Data & Decision-Support Tools for Nature Finance |
Form Of Engagement Activity | Participation in an activity, workshop or similar |
Part Of Official Scheme? | No |
Geographic Reach | International |
Primary Audience | Industry/Business |
Results and Impact | In May 2023 a stakeholder workshop was held at BNP Parabas HQ in London attended by senior staff from finance sector stakeholders, including Greensphere Venture Capital LLP, Barclays, BNP Parabas, Federated Hermes, Taskforce for Nature-related Financial Disclosures, Oxbury Bank, as well as key policy stakeholders from Defra and JNCC. Purpose: (1) Inform a broad spectrum of organisations involved in finance and investment about the state of the art in the sourcing and analysis of data representing the condition of land, water and nature in the UK. (2) Identify the requirements for additional data products, models and tools in order to enable the efficient operation of nature markets, and finance for nature-based solutions in the UK. Outcomes: (1) The streamlining of existing data products was a clear priority. In accordance with this, tools need to help align investment portfolios with biodiversity goals in a similar way to the way this is already achieved for climate-related goals. (2) Other opportunities for improvements were identified. |
Year(s) Of Engagement Activity | 2023 |