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Towards project portfolios
While the focus of this Review has been on the project pipeline – the supply side of nature finance – the findings point to a significant gap in understanding of:
● Who the buyers in nature markets are going to be over the coming decade and what they want in terms of stacked and bundled mixes of ecosystem service credits.
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● How these buyers can discover opportunities that meet their needs and make informed decisions that get good outcomes for all parties and wider society. Investors and buyers of the ecosystem service credits are calling for larger investment opportunities. A challenge for nature finance in all parts of the UK is to progress from the current disparate mix of several hundred aspiring but experimental projects to the presentation of a co-ordinated set of opportunities for this set of buyers and providers of finance. Speed in project development and aggregation will be important as corporates look to find ways to fulfil their commitments to net zero and nature positive activities.
Nature markets are currently driven more by supply-side aspirations and funding needs than proven demand from buyers. A concerted effort is needed by government and enterprise support groups to stimulate business interest in the procurement of ecosystem service credits in the UK. This includes communication of the role of nature finance projects in supporting the economic and community life of rural and coastal areas.
Beyond carbon credits from woodland and peatland, it remains unclear how the nature finance ‘offer’ in any one part of the UK can be organised into a co-ordinated portfolio that will attract the attention of buyers in all their diversity. This situation prevails despite the presence of enablers such as online trading platforms, project developers and regional project coordinators (including catchment markets2).
Notes
2. Catchment markets are schemes to bring together buyers and sellers of ecosystem service credits within river basins. An example is the Bristol Avon Catchment Market.
