Who pays for nature? Aligning capital, land and innovation

Ahead of the Oxfordshire Greentech Climate Solutions Conference, James Cowper Kreston, Mishcon de Reya and Oxfordshire Greentech brought together landowners, farmers, innovators and advisers for a pre-conference dinner to explore one increasingly important question: who pays for nature?

As pressure grows to restore biodiversity, improve climate resilience and meet net-zero ambitions, the question of how environmental improvements are funded has become increasingly important. The discussion highlighted a growing mix of financial mechanisms designed to support nature recovery, spanning public, private and third-sector funding.

Public funding continues to play an important role through government-backed environmental schemes and incentives. Alongside this, private investment is increasingly being deployed through biodiversity and carbon markets, while charitable organisations, environmental groups and collaborative farming initiatives are helping to fund restoration projects and support innovation.

Yet despite the growing number of funding mechanisms available, participants questioned whether current levels of investment are sufficient to deliver the scale of environmental change required. While new markets have created opportunities for landowners and innovators, many around the table felt there remains a significant gap between environmental ambition and the capital currently available to support it.

Balancing land use and commercial value

Biodiversity net gain (BNG) provided a natural starting point for the discussion. Introduced as part of England's planning framework, BNG requires most new developments to deliver at least a 10% improvement in biodiversity. Developers can meet this obligation either on-site or by purchasing biodiversity units generated elsewhere.

This has created new opportunities for landowners who are able to generate and sell biodiversity units, often referred to as BNG credits, to developers seeking to meet their statutory obligations. However, participants questioned whether the market is currently delivering the level of investment many had anticipated. Concerns were raised around oversupply, limited demand and the long-term commitments associated with BNG agreements, which can extend over several decades.

More broadly, the discussion highlighted the competing demands now placed on land. Food production, housing, renewable energy generation, flood management and environmental enhancement all require space, and landowners are increasingly being asked to balance multiple objectives simultaneously.

The conversation reinforced the need for a flexible approach to land use. Highly productive agricultural land may remain best suited to farming, while less productive areas can often deliver greater value through habitat creation, natural flood management or biodiversity enhancement.

As one participant observed, "the challenge for us is finding the balance" between food production, environmental enhancement and commercial returns.

Investing in long-term resilience

Climate resilience emerged as another central theme of the evening. Recent extremes of wet and dry weather are already affecting decisions around land use, productivity and investment.

One landowner illustrated the challenge: "I've got a holding where it spends six months of the year underwater. So do we look at water BNG? No. Should we cover the entire place in solar? Well, no, because that's going to end up underwater. Do you farm it? Well, you can, but only for half the year."

The example demonstrated how climate risks can complicate what might otherwise seem straightforward land-use decisions.

Participants agreed that investment in soil health, water management and biodiversity is becoming increasingly important to protect the long-term productivity and value of land. The difficulty is that the costs are often incurred immediately, while the benefits may take years to materialise.

As one attendee noted: "Farmers know they need to be more sustainable to maintain their soils and they know they need wildlife on there for natural pest control. They know they need them in the long run, but they can't afford them."

The discussion also highlighted examples of collaborative environmental delivery. The North East Cotswold Farmer Cluster was referenced as an example of how groups of landowners can work together to attract both public and private funding to support large-scale environmental restoration and landscape recovery projects. Such models demonstrate how collaboration can help unlock investment while delivering environmental outcomes at a meaningful scale.

Innovation needs a commercial case

Technology featured prominently throughout the discussion, with contributors highlighting opportunities across robotics, precision agriculture, renewable energy, biological innovation and land management.

Examples of practical innovation were already delivering results. One grower described using surplus heat from an anaerobic digestion plant to extend the strawberry growing season, demonstrating how energy and food production can work together to improve efficiency and productivity.

Several participants argued that many emerging technologies are capable of delivering measurable commercial and environmental benefits. New business models are also helping to reduce upfront capital costs and make innovation more accessible.

As one investor remarked: "We don't invest in stuff that isn't better and cheaper. It has to be cheaper because everyone says the same thing: if it's not economically viable, it's not going to be viable."

However, the conversation also explored the particular challenges facing agritech innovators. Participants discussed the so-called "valley of death" that often exists between successfully developing a technology and achieving widespread commercial adoption. While funding can be available for early-stage research and development, businesses frequently face greater challenges securing the investment required to scale.

This challenge can be particularly acute in agriculture, where growers may be understandably cautious about becoming first adopters if a failed trial could jeopardise an entire season's crop. Pilot projects, demonstration farms and trusted early adopters were therefore seen as critical to helping bridge the gap between innovation and implementation.

Change depends on trust

While finance and technology were recurring themes throughout the evening, participants also emphasised the importance of people.

Changes in land use and farming practices affect jobs, businesses, families and communities. As a result, the discussion highlighted the need to consider social outcomes alongside environmental and economic objectives.

Trust was identified as another key ingredient for successful change. Farmers are often more willing to adopt new approaches when they can see practical evidence from peers who have already tested them successfully. Demonstration projects, trusted networks and knowledge sharing all have a significant role to play in accelerating adoption.

As one participant put it: "Goodwill doesn't put food on the table. I think business plans do put food on the table."

So, who pays for nature?

There was no single answer to the question proposed at the beginning of the evening.

Landowners, farmers, businesses, governments, investors, charitable organisations and consumers all have a role to play. Public funding can support transition, private capital can help scale innovation, and environmental markets can create new income streams for those delivering positive environmental outcomes. Yet throughout the discussion, participants repeatedly returned to the question of whether current funding mechanisms are sufficient for the scale of change required.

One attendee summarised what many around the table viewed as the unavoidable reality: "Ultimately who's going to pay for this? It has to be the consumer, because that's where the final bill ends up."

Whether through taxation, investment, incentives or the prices paid for goods and services, society ultimately bears the cost of environmental improvement. The challenge is ensuring those costs are distributed fairly while creating the right incentives for investment in nature recovery, climate resilience and sustainable food production.

The discussion concluded that nature has value, even when that value does not sit neatly on a balance sheet. The opportunity now lies in developing models where environmental benefits and commercial returns work together, giving landowners, farmers and innovators the confidence to invest for the long term.