Is income from natural capital finally becoming a tangible reality?

William Hargreaves from Savills Ipswich

William Hargreaves from Savills Ipswich - Credit: Savills/RMG Photography

William Hargreaves from Savills explores how farmers and land managers can make the most of natural capital.

Natural capital has become a buzzword within rural land management. It refers to the elements of nature that directly or indirectly produce value to society – changing how we view and value rural land.

Examples include carbon sequestration in soil, the health benefits of access to green space, the protection provided by floodplains and wildlife conservation of habitats with high levels of biodiversity.

Recently in England we have seen significant policy announcements and funding set up with the intention of increasing investment in natural capital. These initiatives represent the first steps in converting natural capital from a theoretical concept into a tangible reality – offering farmers and landowners a new source of income for the services they can provide.  

But will policy and regulation dictate how ecosystem services become monetised or will it be left to entrepreneurship to drive the ideas forward?

Take the Natural Environment Investment Readiness Fund (NEIRF), which opened earlier this year and is a competitive scheme which aims to stimulate private investment and market based mechanisms that improve and protect the natural environment.

Grants of between £10,000 and £100,000 are intended to help applicants create projects, build the capability to attract financial investment, and develop a market for their ecosystem services.

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However, while the concept of natural capital is moving in the right direction, ecosystem-based income streams will not simply appear – land managers will have to work together and seek out opportunities for investment.

A collaborative approach will benefit from economies of scale and offers a competitive advantage for tapping into funding.

There is also concern that investment might not trickle down to land managers. To avoid this, rural enterprises must make sure they understand the developing market and be prepared to collaborate and innovate to secure the opportunities for their land and businesses within it.

For advice on the rural sector in Suffolk contact William Hargreaves on 01473 234802 or WHargreaves@savills.com