Source · Select Committees · Environmental Audit Committee
1st Report – The role of natural capital in the UK's green economy
Environmental Audit Committee
HC 501
Published 7 May 2025
Recommendations
8
Acknowledged
Limited land availability constrains supply of natural capital schemes for nature restoration.
Recommendation
The supply of natural capital schemes to the market is inherently limited by the land space which is in practice available for nature restoration. There are constraints in the UK in delivering projects at the scale seemingly required for the …
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Government Response Summary
The government stated its intent to work with the sector to develop a long-term plan for incentivising and funding nature recovery, including a Farming Roadmap with spatial prioritisation, taking Land Use Consultation responses into account.
12
Acknowledged
Clarify how environmental land schemes complement nature restoration and ensure food security
Recommendation
We welcome the consultation on a Land Use Framework and look forward to its publication. We recommend that in the Framework Ministers clarify how environmental land management schemes and other nature funding for farmers ought to complement wider nature restoration …
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Government Response Summary
The government states it will work with farmers to co-create a Farming Roadmap and develop a Land Use Framework, which will include approaches to incentivising nature recovery and safeguarding food production.
25
Acknowledged
Provide report on current and projected private investment in nature recovery within 12 months.
Recommendation
The Government should urgently address the gaps in its data and understanding around the level of investment into nature recovery projects. We recommend that within 12 months of the date of publication of this report the Government provide a report …
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Government Response Summary
The government acknowledges the need to address data gaps by engaging with external partners and the Office for National Statistics to establish a mechanism for monitoring economy-wide expenditure into nature's recovery. They also reference working with The Green Finance Institute, but do not explicitly commit to providing the recommended report to the House within 12 months.
27
Acknowledged
Establish clear, robust baseline assessment methodology for measuring nature gains within 12 months.
Recommendation
The Government must continue to work with both public and private sector organisations, including the British Standards Institute and the International Sustainability Standards Board, so as to establish a clear and robust 59 baseline assessment methodology against which all gains …
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Government Response Summary
The government acknowledges the need to establish a clear and robust baseline assessment methodology, stating it is continuing to sponsor the British Standards Institution’s Nature Investment Standards Programme and is exploring options for the methodology. They do not commit to establishing it within the recommended 12-month timeframe.
Conclusions (7)
2
Conclusion
Acknowledged
Natural capital assets are an essential foundation of the UK and global economy, and we consider that a natural capital approach is vital if the overall value of nature to the UK is to be properly evaluated and developed. (Conclusion, Paragraph 34)
Government Response Summary
The government acknowledges the conclusion by agreeing that the natural capital approach helps demonstrate nature's benefits and promotes sustainable economic growth by making nature's value more visible to businesses and investors.
11
Conclusion
Acknowledged
The Government’s projections for changes in land use in England by 2050, contained in its current consultation on a Land Use Framework, indicate a potentially substantial increase in the land area allocated to nature recovery, either alongside or instead of agricultural production. 56 Implementation of any land use framework, and …
Government Response Summary
The government outlines its plan to work with farmers to co-create a long-term Farming Roadmap and develop a Land Use Framework to safeguard agricultural land and ensure food security.
20
Conclusion
Acknowledged
Compliance, or an expectation of compliance with a future regulation, is a significant driver of demand for nature markets. Clarity and investor confidence in regulatory rules and functions is essential to maintaining stable demand and driving opportunities for investment. (Conclusion, Paragraph 121)
Government Response Summary
The government reiterates its support for BNG policy, noting two recent consultations aimed at improving and extending its application to ensure development leaves biodiversity in a better state.
21
Conclusion
Acknowledged
Regulatory requirements are typically seen as an obstacle to market efficiency. In the case of BNG, compliance consistency is fundamental to trust in the system and the fair and transparent operation of the market. (Conclusion, Paragraph 122) 58
Government Response Summary
The government reaffirms its support for Biodiversity Net Gain (BNG) policy and details recent consultations on applying BNG to Nationally Significant Infrastructure Projects (NSIPs) from May 2026, and improving BNG for minor and brownfield developments. They highlight commitment to economic growth and halting nature decline.
24
Conclusion
Acknowledged
For the Government to determine whether it has delivered on its target to deliver £1 billion of private investment into nature recovery annually by 2030, it must have primary data on relevant financial flows to provide a thorough understanding of investment levels, which it currently lacks. (Conclusion, Paragraph 125)
Government Response Summary
The government acknowledges the need for data by stating it is engaging with external partners and the Office for National Statistics to establish a mechanism for monitoring economy-wide expenditure into nature's recovery. They are also collaborating with The Green Finance Institute's 'Hive' platform to gather data.
26
Conclusion
Acknowledged
It is vital to develop a substantial baseline to measure natural capital improvement metrics against. This is already taking place in some respects (e.g. Natural Capital Ecosystem Assessment (NCEA) data for woodlands) but the current programmes arguably do not provide sufficient granularity to support decisions at farm level. The British …
Government Response Summary
The government acknowledges the need for a robust baseline assessment methodology and states it is continuing to sponsor the British Standards Institution’s Nature Investment Standards Programme, which is producing a suite of standards, including the recently published Overarching Principles Standard and future market-specific standards. They confirm they are exploring options for baseline assessment through these standards.
28
Conclusion
Acknowledged
The ability for nature credits to traced through clear and transparent means is key to ensuring market integrity. Although a register of BNG sites available for offsite investment has now been established, the public interface is still not fully accessible and overall visibility of financial flows into onsite and offsite …
Government Response Summary
The government confirms the existence of a publicly available off-site BNG register and acknowledges that some on-site data exists but is not easily navigable in a single location. However, they state they currently have no plans to develop an on-site register for BNG.