The Bankability of Nature-based Solutions in the Westcountry, UK

Key Learnings

• Rural, often privately owned land offers substantial potential for investments in Nature-based Solutions. Private landowners and private investors have started to acknowledge the importance of Nature-based Solutions and stated to keep their businesses running, while also allowing to manage climate risks.
• Directing ‘green’ private finance towards climate adaptation: Interviews and workshops with the UK green finance sector revealed a willingness to invest in climate adaptation but also identified risk aversion. Nature-based Solutions can lead to viable investments at local scale if investment and cooperation arrangements are clear.
• Investment Pooling and Community-Focused Business Models: Bundling smaller amounts from various investors to finance concrete Nature-based Solutions, makes otherwise unfeasible investments viable. Community Interest Companies are a promising structure to gauge private investment (including resource pooling) to serve the public good, not just make profit.

Summary

In the Westcountry region, UK, private landowners and private investors have started to acknowledge the importance of Nature-based Solutions and stated that they can keep their businesses running while also allowing them to manage climate risks. Whilst large, traditional investors (such as banks) may have certain requirements for viable projects (e.g. clear revenue flows, consistent rate of return over long time periods, etc), smaller companies are more willing to invest in Nature-based Solutions at local scale, such as reduced flood risk/increased drought resilience, as a viable investment as these could directly benefit business resilience. As such, alternative funding/finance mechanisms can be viable in the immediate term. In the Westcountry region, actors expressed preference for pooled finance models, such as the establishment of a Community Interest Company, to share risks and drive investment in, and delivery of, Nature-based Solutions. This model prevents profiteering, securing high-quality environmental outcomes, whilst also delivering the desired return on investment. 

Contact

Westcountry Rivers Trust (WRT), UK

Emily Widdecombe – emilywiddecombewrt [dot] org [dot] uk (emilywiddecombe[at]wrt[dot]org[dot]uk)

Giles Rickard – gileswrt [dot] org [dot] uk (giles[at]wrt[dot]org[dot]uk)

University of Antwerp, Belgium (overall coordinator of TransformAr)

Jan Cools – jan [dot] coolsuantwerpen [dot] be (jan[dot]cools[at]uantwerpen[dot]be)