Driving private investment in nature markets: Call for Evidence outcome and new BSI Nature Investment Standards published

Last week was an important week for the future of UK nature markets. The Department for Environment, Food & Rural Affairs (Defra) published the outcome of a Call for Evidence on expanding the role of the private sector in nature recovery.  In parallel, new elements of the Nature Investment Standards being developed by the British Standards Institution (BSI) were launched. 

In this article we reflect on both developments and what they mean for private investment in nature.

Defra’s Call for Evidence

One of the key recommendations that flowed from the Corry review of Defra’s regulatory landscape in April 2025 was the need to unlock the flow of private investment to support nature recovery. Defra’s Call for Evidence was a practical step towards realising this recommendation. It ran from 12 June to 7 August 2025 and attracted 169 responses from across range of sectors and nature market participants. 

The evidence sought by Defra focused on the conditions needed to support the growth of nature markets from a private finance perspective, looking at two aspects: the first focused on the overall policy approach to increasing private demand for nature‑based services, while the second examined the potential barriers to investment and the role policy could play in addressing them

BSI Nature Investment Standards Programme

The Nature Investment Standards Programme, led by the British Standards Institution (BSI) and funded by Defra, has developed a suite of standards to support the growth of high‑integrity nature markets across the UK by setting out what good practice looks like.  The standards are set out in the BSI Flex 700 series. The overarching principles established in BSI Flex 701 (launched in March 2025) provide a foundation across all UK nature markets.  These are implemented through a suite of “nested standards” which provide more detailed and operational criteria, including both market‑specific standards and thematic, cross‑market standards. 

Last week, the BSI launched two of the nested standards for adoption: the biodiversity benefits standard (BSI Flex 702) and the nutrient benefits standards (BSI Flex 704). This was accompanied by publication of a draft standard addressing engagement with local communities and associated benefits (BSI Flex 705) for consultation, new assessment guidance for market participants and the results of a pilot programme with a range of early adopter organisations testing how the standards work in practice. Defra also published its own guidance on the standards.

Top five take aways from these developments

1. Restoration of the country’s natural capital is central to our long-term, resilient economic growth, and there is a vital role for the private sector funding to play in nature recovery.  Business needs to be supported and incentivised to invest in nature recovery.  The key barriers that need to be overcome include the complexity and uncertainty of engaging with nature markets, the limited supply of high-integrity, verified UK carbon/nature credits and the lack of incentive or imperative to buy most forms of nature-based credit.

2. A coherent, predictable and joined-up policy framework is needed to promote investor confidence.  Defra has confirmed it will provide clear, long-term policy and regulatory incentives, particularly through the revised Environmental Improvement Plan, by supporting the development of sectoral Nature Positive Pathways and through the newly published Land Use Framework.  The BSI Nature Investment Standards also have a part to play in this, by bringing consistent standards to cut across the various nature markets.   

3. High-integrity standards and governance are also vital to enable suppliers, buyers and investors to enter markets with confidence.  The BSI Nature Investment Standards are championed by Defra as a robust assurance system which, while relying on self-assessment for at least the next two years, is ultimately intended to shift to external assurance by accredited conformity assessment bodies.  Defra is also consulting on further steps needed to strengthen high-integrity voluntary carbon and nature markets, with publication of responses expected later this year.

4. Voluntary action is not enough to deliver the scale of recovery required.  Although many businesses recognise the benefits of investing in nature-based solutions or using voluntary offset markets, without a regulatory requirement to do so, there may be a first mover disadvantage or challenge to build the internal business case for investing in nature.  Regulatory levers such as compliance markets (e.g. BNG), disclosure standards (e.g. UK Sustainability Reporting Standards) and other economic incentives are needed

5. Nature-based solutions are increasingly central to sector reform.  A key example is water sector reform.  The government sees the management of land to support our water needs as fundamental to guaranteeing both the quality and quantity of our water supply.  This aligns with the Water White Paper: A new vision for water (published in January 2026) which has a strong focus on encouraging and facilitating nature-based solutions in the future water system through regulatory reform, green investment, regional planning and catchment partnerships.

For further information or advice on any of the developments discussed here, please contact Sarah Sackville Hamilton or another member of our Environment team, who will be happy to help.

This article was written with assistance from Rosie Collier.