Eunomia explored how private sector investment can support nature recovery through mechanisms that blend public and private finance. Our research found considerable appetite among businesses and farmers to collaborate in building a more resilient natural environment.
Government funding, through the Environmental Land Management Schemes (ELMS), rewards farmers for environmentally sustainable land management practices that restore nature, connect existing wildlife-rich habitats, and create new ones.
However, according to the Green Finance Institute, another £44-97 billion is needed to meet UK nature recovery targets over the next decade.[1] As the 25 Year Environment Plan highlights, we need private as well as public sector investment to fund measures that will mitigate climate change, reduce flood risk, and protect and restore biodiversity.[2]
Shropshire Wildlife Trust asked Eunomia to explore how private sector investment could help close the funding gap by supplementing or replacing ELMS.
We conducted market research to match the types of nature-based project that landowners could deliver with private sector demand and to understand which finance mechanisms would work for each party. We interviewed local businesses to learn what kinds of benefit they seek from nature-based solutions – such as biodiversity gain, carbon storage, or flood management. Farmers were also asked about opportunities, barriers, and preferences for using private finance to pay for nature recovery.
We found that, with nature markets and associated policies rapidly developing, many market players are hesitant about long-term investments. Both landowners and local businesses value flexibility, strong relationships, and a shared vision of the future as foundations for negotiation.
Organisations like Shropshire Wildlife Trust can play important roles in finding common ground, identifying mutually appealing nature-based projects, and brokering finance arrangements.
Our research generated insights to help SWT, and similar organisations, navigate the challenges and opportunities of forging relationships and deals between farmers and businesses, enabling them to work together for a healthier environment and a more sustainable future.
[1] Green Finance Institute 2021 The Finance Gap for UK Nature.
[2] HM Government 2018 A Green Future: Our 25 Year Plan to Improve the Environment.