Wildflowers. Cranbourne Chase, Dorset. Credit: Getty Images.
I'm Will Lockhart, Deputy Director for Nature Markets and Investment at Defra. In March, I wrote about how we're encouraging more private investment in nature recovery in England – including making it easier for businesses to pay for the benefits nature provides, and launching new, world-leading nature investment standards. Today, we mark another important step for nature: helping large professional investors put money into nature recovery projects here in England.
We often hear that large investors want to support UK nature recovery, but there aren't enough suitable opportunities for them to do so. The main barriers are a shortage of projects big enough to invest in, and uncertainty about whether those investments will generate a reasonable financial return.
To help address this, Defra has helped create, and committed funding to, a new investment fund for nature: the Big Nature Impact Fund. The Fund acts as a gateway for investors, so rather than spending time and money searching for individual nature projects, they can invest more quickly and efficiently through the Fund. Defra's £30 million investment takes on more of the financial risk, meaning private investors get their returns first – making it less risky for them to get involved.
Defra competitively selected Finance Earth – a mission-driven, regulated fund manager – to design and manage the Fund. Their job is to raise £2 of private investment for every £1 of public investment, and to find suitable nature projects for the Fund to support. Investee projects must contribute to the government's Environmental Improvement Plan goals and deliver a financial return. Initially, this means the Fund will invest in habitat creation schemes, woodland planting projects, and peatland restoration.
The Fund has now reached its first major milestone, securing just under £35 million in private investment from insurance companies, foundations and high-net-worth individuals. This means over £17 million of Defra's investment is ready to be put to work. Finance Earth is aiming to grow the Fund to between £90 million and £120 million over the next 18 months. More information is available in the Fund's press release and website.
Defra has also put in place reporting requirements so others can learn from how the Fund performs. We want investing in nature to become normal practice, and we hope the Fund will give other investors the confidence to follow suit.
This is another important step, and I look forward to the Fund making its first investments and following its journey; because as Minister for Nature, Mary Creagh has said: " Nature is the foundation of our economy, and we now have a real opportunity to protect and restore it for future generations. We need a whole-economy approach to nature recovery, and the Big Nature Impact Fund shows that smart use of public money can unlock major private investment to restore our natural environment, strengthen the green economy, and support communities across the country."
seen at 10:31, 28 May in Environment.