New UK nature market standard launched

Last week, the British Standards Institution (BSI) launched its new 'BSI Flex 701 Nature markets – Overarching principles and framework standard'.

After the Government launched its Nature Markets Framework and Green Finance Strategy last year, BSI has been working with Defra on its Nature Investment Standards Programme (launched in March 2023) to develop operational standards for the supply of ‘high-integrity units’ in nature markets, e.g. biodiversity, natural carbon and nutrients. This all feeds into the Government looking to scale up private investment into nature and contributing to the UK’s environmental goals, including reversing biodiversity loss and achieving net zero.

This standard outlines an overarching set of principles and a common definition of nature investments, and importantly outlines steps in provision against ‘greenwashing’. The principles outlined in the standard include transparency, governance, quantification of units, timing of information (linking to transparency), competence of delivery, openness to innovation, delivering multiple benefits to nature, and local community engagement. All these principles link into ensuring integrity in these markets, and this ultimately links back to value.

Looking at the detail in the standard around selling units, sellers are responsible for integrity of units, showing additionality, permanence of contracted environmental outcomes, supplying units that are validated and verified and proportionate engagement with the local community. Avoiding unintended consequences is also outlined in the standard as a seller, with the detailed principle below.

“Principle on unintended consequences: Actions to supply units from a supply area avoid material negative environmental impacts”. The standard adds: "Many changes to environmental management bring the possibility of a small loss of some aspect of nature’s value. Such losses are unavoidable but should be minimized."

Looking into details around the trading processes, ethical buyers and market ease of access are referenced (e.g., market trading and/or engagement). Finally, no double counting is referenced clearly within the standard, as well as stacking and bundling rules.

“Principle on stacking: Multiple types of units can be sold from the same supply area as part of a stack when there is robust measurement and verification of additionality in place for each type of unit in the stack”.

These underlining principles are all very much in line with the previous Nature Markets Framework and therefore may not come too much as a surprise for many. Going forward, standards including for biodiversity and natural carbon will go into more detail on the specific requirements needed in those markets, particularly in relation to the supply of units – so look out for these. However, as outlined by the Government in its latest update released last week, further work will be needed to ensure integrity in these markets. For more information on next steps for the Government, follow this link to the Gov website. The Farming Toolkit from the Green Finance Institute provides additional guidance to navigate the emerging nature market opportunities.

Open consultation:

Importantly, a consultation phase has been launched alongside this new BSI standard to receive feedback on this first iteration. AHDB will be feeding into this consultation, supporting the needs of levy payers across nature markets. This closes on 1 May 2024.

For more information on the consultation or to feed in, please follow this link.

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