This fund will provide grants of up to £100,000 to environmental groups, local authorities, businesses and other organisations to help them develop nature projects in England which both provide environmental benefits and attract private investment.
One example would be new woodland creation which provides habitats for wildlife, green spaces for the public and carbon sequestration, but could also benefit investors through timber revenue and carbon credits.
Another example being the restoration of river catchments. As well as improving water quality and reducing flood risk, it would deliver financial incentives to water companies through reduced costs for water treatment.
This will create a pipeline of projects for the private sector to invest in, and develop new funding models that can be replicated elsewhere, demonstrating the UK’s leadership in nature finance in the run-up to COP26 in November.
The evidence from projects like these will also be key in understanding what does and doesn’t work for environmental outcomes to attract private investment.
Environment Minister Rebecca Pow said:
Our 25 Year Environment Plan made clear that while the public sector will continue to be a central source of funding, it is critical that this is alongside more private sector investment to protect and enhance our natural environment.
Investors are rightly recognising environmental factors as key drivers of value. As we look to build back greener from the pandemic, I would encourage any interested businesses, local authorities, eNGOs or other organisations to bid for a portion of this fund.
Emma Howard Boyd, Chair of the Environment Agency, said:
The Government are calling for a green industrial revolution at the same time that investors, including people saving for their pensions, are looking for economic returns that reverse natural decline and manage climate shocks.
There are already examples of this happening, but the global economy needs more evidence if it is going to reach a tipping point that mobilises trillions of dollars towards nature. This fund will help, demonstrating funding models that can be replicated, providing long-term benefits for the economy and the environment, and showing UK leadership ahead of COP26.
The Fund has been designed by Defra and Environment Agency, working with HMT, Natural England and the Access Foundation for Social Investment.