New world-leading nature finance standards launched to encourage green investment
Source: gov.uk (2025-03-25)

New standards will set the bar for nature investments, prevent greenwashing and helping business invest in restoring nature

- The Overarching Principles Standard is the first of its kind, supporting investment in high-quality projects which restore rich habitats.
- The move marks the UK out as a world leader in the development of nature markets and will drive economic growth as part of our Plan for Change.
New government-backed pioneering green finance standards have been introduced today (Tuesday 25 March) to boost investment into nature and support economic growth, as well as helping to clamp down on “greenwashing”.

This landmark standard - launched by British Standards Institution (BSI) - will help nature-friendly investments across the UK to grow, by building confidence among businesses that these investments are making a real difference for our natural environment.

These new standards will bring a variety of benefits for the environment. Projects that could be supported include restoring wetlands, improving water quality, building flood resilience, and creating new habitats.

Through the Plan for Change this Government is working to deliver economic growth across the country, and to support this, we will make the UK the green finance capital of the world.

A healthy natural environment is crucial to economic growth. Without a healthy environment, there is no food, no business, and no economy. The Green Finance Institute found that nature-related risks including water shortages and soil health reduction could lead to a 6% reduction to GDP in the years ahead. That is why economic growth and nature restoration must go hand in hand.

This is the first standard for collective nature markets of its kind in the UK, and one of the first in the world, marking the UK out as a global leader and marks our ambition to pioneer nature markets which guard against greenwashing and lead to lasting environmental change.

Secretary of State for the Environment, Food and Rural Affairs Steve Reed said:

We need urgent action from across society to address the nature crisis, and businesses have a crucial role to play in that effort. By having clear standards, we can strike a blow to greenwashing and give businesses confidence that their investment is truly helping our natural world recover.

Through the Plan for Change, this Government is working relentlessly to grow the economy and this move gets us one step closer to fulfilling our ambition to make the UK the green finance capital of the world.

Scott Steedman, Director-General, Standards at BSI said:

Today marks a key milestone for the Nature Investment Standards (NIS) Programme with the launch of updated overarching principles ready for adoption across the UK.

The principles are designed to provide consistency and rigour for high-integrity UK nature markets that trade in real, measurable environmental benefits. This supports the goal of increasing investment into nature, helping to create new revenue streams for farmers, land managers and other suppliers of nature-based solutions.

BSI, in its role as the UK National Standards Body, looks forward to working closely with Defra to enable the take up of the revised standard and its implementation in the market.

Wales’ Deputy First Minister with responsibility for Climate Change and Rural Affairs, Huw Irranca-Davies, said:

This new standard will help make sure that when people invest in our natural environment, they do so in the right way. Setting clear rules for nature markets in Wales will help protect our environment while also creating new opportunities for a stronger, fairer, greener economy.

We’re working together with a range of partners, including Defra, the BSI and other devolved governments, to create these standards to make sure that they work well for everyone involved.

I encourage all businesses and investors interested in nature markets to begin adopting this standard now.

The Scottish Government’s Cabinet Secretary for Rural Affairs, Land Reform and Islands Mairi Gougeon said:

We welcome the launch of the BSI Overarching Principles Standard for UK nature markets.

This is an important step in setting out clearly what is required for markets to operate with high integrity and therefore it underpins our commitment to develop value-led and responsible natural capital markets in Scotland.

Minister of Agriculture, Environment and Rural Affairs in Northern Ireland Andrew Muir said:

I welcome the development of this programme, and I am grateful to both BSI and Defra for working to streamline the current landscape around nature markets. I look forward to the further development of the programme as it progresses towards a more standardised approach to Nature Credits.

Increasing investment in nature restoration through high integrity nature markets has the potential to help us deliver much needed nature restoration at scale and will have an important role to play in helping us achieve our biodiversity targets as set out in the Environmental Improvement Plan for Northern Ireland.

The new Overarching Principles Standard was created following an established BSI market led process for standards development which included extensive consultation with businesses and land managers.

BSI is also launching a consultation on a first version of a Natural Carbon Standard, as part of a wider framework of standards. This will gather market views specifically on high integrity principles for projects selling nature-based carbon credits in UK markets. These credits will consist of habitats which store carbon, such as woodlands or peatlands, helping us to reach Net Zero while providing benefits for landscapes and wildlife.

The Overarching Principles Standard (BSI Flex 701) is immediately available for use by market participants and will support investment in high quality nature and sustainable farming projects in the UK.

NOTES TO EDITORS:
- More information on the Overarching Principles Standard can be found here (https://www.bsigroup.com/en-GB/insights-and-media/insights/brochures/bsi-flex-701-nature-markets-overarching-principles-and-framework/).
The Overarching Principles and Natural Carbon standards are part of a family of standards which will apply to nature markets. Other standards are in development and will cover Biodiversity markets, Nutrients projects and schemes and guidance on how projects should engage with local communities. There is a new BSI navigation tool available on the BSI Nature Markets online Hub – to help stakeholders navigate the suite of BSI nature investment standards.

Further details of a formal assurance framework to verify compliance will be set out in due course.
- The BSI have published research on assurance which sets out options for Government to ensure compliance with the new standards.