New standards aim to unlock private investment in nature markets
The UK Government and the British Standards Institution (BSI) have announced a significant step forward in the development of nature markets, with the publication of new Nature Investment Standards and supporting policy updates intended to unlock private finance for nature recovery.
Nature markets – where businesses pay for environmental benefits such as biodiversity, carbon storage and water quality – are seen as a key mechanism for delivering the UK’s environmental ambitions. However, concerns around consistency, transparency and “greenwashing” have historically limited investor confidence.
The newly published BSI Nature Investment Standards (Flex 700 series) aim to address these challenges by providing a clear and consistent framework for how nature-based projects are designed, measured and reported.
New standards for biodiversity and nutrient markets
At the centre of the announcement is the launch of two new standards:
- BSI Flex 702 – Supply of Biodiversity Benefits
- BSI Flex 704 – Supply of Nature-based Nutrient Benefits
These standards set out detailed requirements for how biodiversity and nutrient credits should be quantified, verified and reported, helping to ensure that environmental outcomes are credible and comparable across projects.
Together with the overarching principles standard (Flex 701) and further standards in development, they form what government describes as one of the most comprehensive frameworks for nature markets globally.
Building confidence and integrity in nature markets
The standards are designed to improve market integrity and build trust among investors, developers and buyers. By establishing common rules and expectations, they aim to reduce the risk of greenwashing and provide greater confidence that investments deliver genuine environmental benefits.
They also introduce a phased assurance approach, beginning with self-assessment and moving towards independent verification, to support uptake while maintaining rigour.
Strong appetite for private investment
Alongside the standards, Defra has published summaries of responses to its call for evidence on private investment in nature recovery and its consultation on voluntary carbon and nature markets.
These responses highlight strong interest from businesses and investors in financing nature-based solutions, but emphasise the need for:
- Long-term policy certainty
- Clear and streamlined governance
- Greater transparency and consistency
- Government support to de-risk early investment
A growing role for the private sector
The Government has made it clear that private sector investment will be essential in meeting environmental targets, with nature markets providing a mechanism to channel funding into habitat restoration, biodiversity enhancement and water quality improvements.
The introduction of these standards represents an important milestone in creating the conditions for these markets to scale. However, Defra has also emphasised that this is “not a finish line”, with further work planned on assurance frameworks, and additional standards (including community engagement).
What this means for the profession
The development of high-integrity nature markets is likely to increase demand for robust assessment, monitoring and verification of environmental outcomes. The new standards provide a clearer framework for delivering and evidencing these outcomes, while also raising expectations around transparency, additionality and long-term stewardship.
CIEEM will continue to monitor developments in this space and engage with government and industry to ensure that emerging nature markets deliver meaningful benefits for biodiversity and society.