Green is the New Gold: Financing a Sustainable Economy

In March 2025, the government launched new green finance standards for nature-based investing. This is a clear signal from government of how it sees the role of natural capital investing in driving future economic growth and supporting its net zero targets.

It is consulting on policy proposals and governance framework for raising the integrity of voluntary carbon and nature market credits, and the use of such credits. The use of these markets can raise additional finance and accelerate progress towards climate and nature goals, and many businesses wish to use them as part of their climate and nature strategies.

This is the first standard for collective nature markets of its kind in the UK, and one of the first in the world, reflecting the government’s ambition to position the UK as a global leader in pioneering nature markets that lead to lasting environmental change and economic growth. The British Standards Institution (BSI) is optimistic this will increase investments in nature-based solutions across the UK by building confidence among the investment community of the integrity of nature markets. The Overarching Principles Standard (BSI Flex 701) is immediately available for use by the market and will support investment in high quality nature and sustainable farming projects in the UK.

In parallel, the BSI has launched a consultation on a first version of a Natural Carbon Standard as part of its 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. 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.

The government is in listening mode, keen to harness the potential of natural capital to drive vital economic growth and sees clear political merit in moving this forward at pace. DEFRA and the BSI are keen to hear from businesses and organisations to shape these standards and we strongly encourage all those with expertise and interest in natural capital investing to contribute to the consultation process.

If you’d like to discuss this in more detail, including how GK Strategy can support you with government relations and communication, please contact Thea Southwell Reeves.

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