Bevis is the outgoing CEO of Triodos Bank UK, the pioneering sustainable bank. He became CEO in 2016, having previously been Chief Executive of Avon Wildlife Trust. He has held numerous Directorships and Trusteeships and worked in sustainability for more than 25 years, including recycling, conservation and banking. He is also author of the book ‘River Journey – searching for wild beavers and finding freedom’ (2022).

At Triodos Bank we have led the development of a number of landmark transactions for nature-based investment in the UK in recent years. While these demonstrate nature-based business models are viable for private investment, the overall scale of investment in nature’s recovery that is needed in order to support climate change resilience, prevention and biodiversity gain remains enormous. From effectively a standing start, Defra has estimated £500m of private finance is needed annually by 2027 and £1bn by 2030, and we know the billions required to restore nature cannot come from governments alone.

Having worked on developing and financing nature-based projects since 2018 we cannot see the scale of investment needed being met without further market intervention and support. We have gathered significant insight on market barriers and failures that prevent investment in nature recovery from scaling faster. It has become clear that there is an urgent need and an compelling economic opportunity for a ‘Market Development Programme’ to increase nature-based investment and further nature recovery and natural capital as growth sectors in the UK.

We have advocated with other organisations for many years that this is not about new investment models, as adaptations of existing financing models can work for a wide variety of nature-based projects. We have also advocated that the money and motivations exist to support nature’s recovery, and therefore the need for dedicated fund management, is limited. In other words, there is no shortage of capital for nature recovery. The principal market failures arise on the project supply side with a lack of investment ready projects being developed, contributed to by a lack of certainty about revenues available from nature-based solutions.

A dedicated market development programme is needed to ensure the goals set under the government’s Environment Improvement Plan are met. It could be delivered in many forms but would ideally be akin to the Carbon Trust or Waste & Resources Action Programme (WRAP) which were both established to address market failures. Both have since become independent of government and leveraged the intellectual property they created to become internationally leading organisations in carbon reduction and circular economy respectively.

Triodos Bank operates in five European countries and in our view the UK is ahead of other countries in developing commercially investable projects for nature recovery – so we have an opportunity to develop world leading expertise in nature-based investment and potentially to attract private sector match funding for government support.  

The scope of a market development programme could include replication and capacity building through seed funding, transparency and awareness campaigns amongst landowners, farmers, NGOs and the financial community.

It could encourage market confidence and integrity, given that no two projects will be exactly the same with many variables affecting the likely sources of ecosystem service income. Mainstream financial institutions require scalability and replicability if they are to invest time in understanding business models and the associated risks. Therefore, standardising project elements where possible will support the engagement of financial institutions, including national standards for the measurement and auditing of ecosystem services, development of new carbon standards and strengthening carbon and biodiversity markets.

Regulatory capacity and expertise is currently a barrier. Environmental regulators neither have the remit nor capability to oversee nature markets. A programme could support establishing an oversight body and scaling up the legal, economic and environmental expertise and skills required to grow this sector, incorporating individuals with private investment expertise on relevant boards. Although in its early stages, the Environmental Markets Board established by Wessex Water Limited to oversee the market operations of EnTrade provides a useful learning model which a programme could evaluate with a view to establishing best practice.

Whilst many individual projects are now providing replicable templates, these are largely single site specific, or on a relatively small landscape. This means there is an inherent mismatch of size of transaction and the appetite of much of the financial sector. A programme could explore and make recommendations to government on governance models that would ensure better coordination and unlock large scale investment at landscape scale – ideally at a river catchment scale as water supply and flood mitigation will remain one of the key and most valuable ecosystem services.

We recognise that a lot of good work in relation to the market failures is already being undertaken within academia, NGOs, consultancies and other market stakeholders. The WRAP and Carbon Trust programmes were proven successful because they provided a centralisation and coordination of efforts nationally, delivering best value for public money.

Many of our customers, partners and other stakeholders working on nature-based investment agree the concept of a market development programme would be positive.

The Corry Review published in April 2025 is good news and is now the basis of the Treasury commitment on a Nature Market Accelerator. Let’s hope the government can develop the concept further and urgently progress with a market development programme that will give a much needed boost to this sector.  

Dr Bevis Watts
Triodos Bank
May 2025