BSI launches first edition of UK nature investment standards

The UK, despite its global standing, ranks among the most nature-depleted nations.

Last year, BSI and the Department for Environment, Food & Rural Affairs launched the Nature Investment Standards Programme, to enhance market confidence and increase private sector investment into nature recovery and nature-friendly farming.

Yesterday (21 March), BSI opened a consultation on its first set of nature investment standards, BSI Flex 701 Nature Markets – Specification v1.0. These standards outline requirements for the design and operation of high-integrity nature schemes, and processes to generate, trade and store nature units.

The BSI Flex standard is designed for iterative development, allowing for ongoing refinement in response to evolving market dynamics and emerging policy directions.

Feedback and comments on this initial version will shape subsequent iterations, ensuring its relevance and effectiveness in the landscape of nature finance.

BSI’s director general for standards Scott Steedman said: “Nature-based solutions have a central role to play in reaching net-zero and meeting global environmental challenges.

“The specification is designed to bring clarity and consistency to the market by establishing a standardised approach for investments that can boost confidence in the integrity of nature markets.

“These newly agreed principles offer an essential foundation to help to guard against greenwashing, encourage investment into an important, emerging market and ultimately accelerate progress towards a sustainable world.”

State of UK nature investment

Late last year, Pollination, a global climate change investment and advisory firm, released its “Nature Finance Focus: Tracking Global Trends in Nature Investment” report. The report surveyed 557 institutional investors, with 332 managing more than $100bn in assets, across six jurisdictions: the UK, USA, Australia, France, Singapore and Japan.

The report found that more than two-thirds of investors plan to increase their investments in nature-related ventures, with 75% believing that such investments will eventually evolve into a distinct asset class.

The report noted that UK investors reported higher exposures to nature-related investments compared to counterparts in other markets, with 47% of UK investors having investments in nature-based solutions.

According to the report, returns were the highest motivator for investors globally at 60%, with impact as the second highest motivator.

UK investors were the least likely to highlight improved nature outcomes as a primary motivator (19%), and the most likely to highlight short-term returns as a singular motivator (22%).

Research has previously revealed that the UK will need to increase its investment in nature by at least £44bn and by as much as £97bn, by 2032, to meet its own environmental commitments.

Green Finance Minister Lord Benyon said: “A strong policy framework will boost investor confidence in nature markets, creating the foundation for these markets to grow.

“As a Government, we have set out the next steps to close the nature funding gap in England and the creation of the Overarching Principles Standard is another important step towards meeting our goal.”

The UK Government is anticipating that the new standards will help boost annual private investment flows for nature to more than £1bn per year by 2030.