The Committee is hearing evidence from Government ministers Lord Benyon and Baroness Vere. The ministers will be accompanied by senior officials from the Department for Environment Food and Rural Affairs and the Treasury.

ISEP Director Policy & Public Affairs, Ben Goodwin said: “Creating the right conditions to channel private investment into nature recovery and to enhance natural capital assets is key if we are to achieve our long-term environmental goals. It will also make the UK's economy more dynamic and support the kind of good growth that we need.

“But it's important that the right regulatory environment is created for this to happen and that robust standards are used to ensure the integrity of the funding and financing flows into and out of nature. We eagerly await the outcome of the EAC's inquiry and expect its recommendations to government on these points to be thorough."

ISEP’s submission to the inquiry also called for:

• Government to create an appropriate regulatory environment for nature markets.
• Government to invest in nature markets to create proof of concept, and case studies, demonstrate how nature can provide return on investment, and create capacity, especially in the financial sector.
• Government to support good practice principles for activities in nature markets including using the mitigation hierarchy, creating additionality, following the Lawton principles of the right thing in the right place, and an approach that is more, bigger, better, and joined-up.
• Government to mandate transparent reporting of double materiality impacts using a recognised framework for reporting such as the Task-force for Nature-related Financial Disclosure (TNFD).
• Robust and standardised monitoring and measuring over long periods.
• All new ‘standards’ whether the Green Taxonomy or BSI standards must align as much as possible with frameworks and regulations already in place and being used by businesses, to reduce capacity building and accelerate use.

In 2022, the World Economic Forum reported that more than half global GDP – $44 trillion – is at immediate risk due to nature loss.

In 2021, the UK Government committed to growing private investment in nature to more than £1 billion by 2030, while in 2023, the Nature Markets Framework set out core principles for nature markets, through which natural capital assets can be bought and sold. Members are likely to ask witnesses whether the Government is on track to achieve its goals for private investment and whether these targets were ambitious enough in the first place.

They may also ask whether natural capital assets are likely to be ‘traded’ as a commodity in future and whether the UK’s domestic targets here are aligned with international goals set in recent COP agreements on climate change and biodiversity.

Read ISEP's full response here.