Significant huge ramp up of private investment “urgently required” to hit nature-positive targets in the UK.
Almost £100 billion of additional investment from public and private finance could be needed over the next decade to meet the UK’s natured-related targets.
A new report from the Green Finance Institute (GFI) has revealed that between £44 billion and £97 billion of extra cash is required to achieve nature-positive and net-zero outcomes, including biodiversity protection and restoration.
Specific areas needing investment include clean water, reducing flood risk through flood management, climate mitigation through biocarbon, enhanced biosecurity and improvement in access to and engagement with the natural environment.
GFI’s ‘Finance Gap for UK Nature’ report outlined the gap between required and committed spending associated with the delivery of nature-related outcomes across England, Wales, Scotland, Northern Ireland, and the UK’s Overseas Territories over the next 10, 20 and 30 years.
The largest gap regionally lies within England at between £21 billion and £53 billion over the next decade. The gap in Scotland was between £15 billion and £27 billion, with relatively small gaps for Northern Ireland and Wales.
Nature-related outcomes are based on public policies including the 25 Year Environment Plan for England and equivalent policy frameworks for the rest of the UK. The report identified seven specific nature-related outcomes and used available data to calculate funding gaps for the UK and its devolved administrations.
The largest funding shortfalls specific to outcomes lie within climate mitigation through biocarbon – £20 billion over 10 years – and the protection and restoration of biodiversity – £19 billion over 10 years.
Climate mitigation through biocarbon refers to land investment to reduce greenhouse gas emissions and increase carbon sequestration. Protection and restoration of biodiversity encompasses investment in coverage of protected areas, managing pressures on habitats, increasing species’ abundance and reversing losses covering both terrestrial and marine biodiversity.
A new tool launched by the UK’s Natural History Museum to demonstrate changes in biodiversity across regions over time put the UK in the bottom 10% of countries. According to the Biodiversity Trends Explorer, the UK has only half (53%) its native wildlife intact, largely due to the impact of the industrial revolution. Globally, biodiversity intactness is calculated at 75%, well below the 90% considered safe to maintain the ecological processes such as pollination and nutrient cycling.
Public investment “not enough”
GFI commissioned environmental economics consultancy eftec to identify the extent to which private investment is required to meet the UK’s net zero and nature-positive ambitions by investing in nature-enhancing projects.
Dr Rhian-Mari Thomas, Chief Executive of the GFI, said: “The data is conclusive that public investment – even if funding commitments increase – will not be enough to fund the UK’s nature recovery ambitions. Private investment is therefore urgently required in addition to public sector funding if we hope to transition to a net zero and nature-positive economy.”
Thomas said urged renewed efforts to unlock barriers to the mobilisation of private finance into nature-positive projects and businesses.
“Harnessing the momentum of the Convention on Biological Diversity COP15 and COP26, there is an opportunity to create high integrity environmental markets and investment opportunities that work for nature, society and the economy to help close this UK finance gap,” she said.
Head of Nature Programmes Helen Avery said the GFI would use the report’s findings and the recommendations of the upcoming Financing UK Nature Recovery report to engage with the UK finance sector and other stakeholders “to identify the barriers to private capital for priority nature-positive outcomes, and to develop practical solutions to support the growth of investment in nature in the UK”.
Galvanising investor action
The report came as the first half of the COP15 Biodiversity Convention (CBD) in Kunming, China, kicked off online on 11 October. Policymakers will discuss the draft Global Biodiversity Framework (GBF) that will be formally signed and adopted during part two of the convention in April and May next year in Kunming.
Its 21 overarching targets and 10 milestones are hoped to spur national regulatory measures and galvanise investor action, notably Target 15, which requires businesses to assess and report on their dependencies and impacts on biodiversity.
Meanwhile, the Task Force on Nature-related Financial Disclosure (TNFD) aims to build on the framework originally designed by the Task Force on Climate-related Financial Disclosure (TCFD), in order to provide financial institutions and corporates with a complete picture of how to measure and report nature-related risks and opportunities. The finalised framework will be published in 2023.
