A new report from Oxbury Bank explores the opportunities available from natural capital markets, and how famers and larger corporate organisations can work together to access them.
The 22 page Exploring Nature Markets within the Structure of Emerging Regulation for Corporates report was developed by Oxbury Bank and the Environmental Farmers Group (EFG) of over 500 British farmers managing around 4% of England’s farmed area. The report shows how corporates and farmers can work together to restore nature at scale; includes a detailed analysis of the available nature payments for farmers; and explores the opportunity to link small-scale, nature-based projects to a larger framework to appeal to corporates.
It concludes that that success in nature markets will increasingly depend on connected groups of farmers working together, as opportunities for individual farms diminish and the demand for corporate investment rises.
The report notes that carbon legislation and regulations require the private sector to report on their carbon emissions and take action to reduce them – which is fuelling growth in the ‘green economy’.
As a result, the demand for nature-based solutions currently outweighs the credible and measurable supply. To deliver at scale, a multi-stakeholder management approach – involving cluster farmer groups such as the EFG and local authorities – will be needed to meet the levels of corporate demand.
Oxbury says this is the first time an opportunity scale of this type has been produced – it highlights the discrepancies in the size of the markets, explaining why individual farmers are choosing easier-to-access nature projects.
But there is a clear opportunity to link small-scale, nature-based projects to a larger framework that appeals to corporates. Farmer cluster groups and collective groups of farmers can deliver these projects more easily than individual farms, given the scale, which can reap greater financial reward.
“Nature is bankable,” says Oxbury Bank managing director Nick Evans. “As the only UK bank dedicated to agriculture, we want farmers to understand the opportunities and the size of the demand from nature services.
“This new report is an essential read for farmers, landowners and land managers as it shows the substantial income opportunities available to them that will also ensure nature continues to thrive as part of a resilient global economy.”
Digby Sowerby, operations officer for the EFG, adds: “We know farmers want to deliver environmental projects, but the economics often don’t stack up. This report with Oxbury Bank has shown how nature markets can provide a new income stream for farmers alongside other natural capital markets such as carbon and Biodiversity Net Gain.
“Businesses reporting on nature will underpin a new structure for financing environmental delivery on farms. But these markets will take time to develop.”