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  • by Karma Loveday

Parliamentary committee to scrutinise the role of private capital in nature recovery

The Environmental Audit Committee (EAC) has opened an inquiry into the role of natural capital in the green economy.

The committee will assess the current and potential future role of natural capital and the Government’s proposals to increase private investment in measures to support nature recovery. The scrutiny follows the 2021 Dasgupta Review and the March 2023 Green Finance Strategy and Nature Markets Framework, the latter of which recognised that many of the valuable ecosystem services provided by nature, such as carbon sequestration, clean water, biodiversity and natural flood management, are still ‘systematically undervalued’ in the UK economy.

The EAC will examineeight principal questions in the course of its inquiry.

  1. What potential contribution can private capital investment make to measures to secure nature recovery?

  2. How can investment best be aligned with environmental benefits, so as to achieve or surpass the Government’s targets for nature recovery?

  3. What measures are necessary to (a) establish and (b) maintain the high-integrity markets in ecosystem services which are expected to attract private investment? What confidence do investors currently have in the UK’s arrangements for these markets?

  4. What contribution will data from the Natural Capital and Ecosystem Assessment (NCEA) programme make to the objective measurement of changes in environmental outcomes?

  5. How can the proposed UK Green Taxonomy support high-quality investments which deliver genuine benefits to nature? What financial disclosures should the taxonomy require?

  6. How can the operation of natural capital markets ensure genuine net gains for nature? How do such markets address the risk of ‘greenwashing’ of investments and the offsetting of natural recovery in the UK against environmental degradation elsewhere?

  7. What role can the UK’s financial markets play in developing the flow of international capital into the development of the UK’s natural capital?

  8. What role does the UK have in establishing international standards for natural capital investments, alongside other jurisdictions and financial centres?

The inquiry’s call for evidence is open until 22 September. Submit evidence here


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