Why companies buy nature credits

Statutory obligations

Some nature-credit purchases are required by law.

In England, most new housing and commercial developments must deliver at least a 10% Biodiversity Net Gain under the Environment Act 2021. Developers who cannot deliver that gain on their own site can buy biodiversity units from registered off-site providers — small habitat banks, private landowners, or landscape-scale schemes.

Water companies in England and Wales operate under price controls set by Ofwat that include outcomes-based targets for water quality, flood resilience, and catchment health. Investing in upstream nature-based solutions is one of the ways those targets are met.

Some infrastructure projects — roads, railways, energy grids — face planning conditions or legal settlements that require environmental mitigation delivered through credits.

Reporting obligations

Larger companies in the UK, EU, and many other jurisdictions face mandatory or near-mandatory reporting on environmental and social performance.

The Taskforce on Climate-related Financial Disclosures (TCFD) framework, now being succeeded by the International Sustainability Standards Board’s IFRS S1 and S2 standards, asks companies to report on their climate-related risks and transition plans. A rising share of FTSE-listed companies also report under the Taskforce on Nature-related Financial Disclosures (TNFD) framework, which does the same for nature-related risks.

The UK’s Financial Conduct Authority ESG Sourcebook governs how firms describe their sustainability claims. Its anti-greenwashing rule (ESG 4.3.1R, effective 31 May 2024) requires that sustainability-related statements are fair, clear, and not misleading, and its naming and marketing rules (ESG 4.3.2R–4.3.10R) set out how products and funds may use sustainability-related terms.

Companies use credits from verified, high-integrity schemes to back up the claims they make in these reports.

Voluntary commitments

Beyond what the law requires, many companies make voluntary commitments — to net zero, to nature-positive operations, to alignment with the Science Based Targets initiative, or to principles such as those of the UN Global Compact.

Corporate Social Responsibility (CSR) programmes often include support for restoration schemes, either through direct credit purchase or through sponsorship. This overlaps with ESG reporting but is broader and usually more discretionary — a company buys CSR credits to demonstrate values as well as to meet reporting lines.

Integrity in the voluntary market is addressed by frameworks including the Integrity Council for the Voluntary Carbon Market (ICVCM) and the Voluntary Carbon Markets Integrity Initiative (VCMI), and for corporate offsetting claims, the International Carbon Reduction and Offset Alliance (ICROA) code of best practice.

Investor expectations

Pension funds, insurance firms, and asset managers are increasingly expected to steward their investments in line with long-term environmental goals. Frameworks such as the Principles for Responsible Investment (UN PRI) encourage this alignment.

Large companies answerable to those investors face questions about how their operations relate to nature loss — and increasingly answer those questions partly by investing in verified restoration.

Reputation and customer expectation

Consumers and employees pay attention to what companies do, not just what they say. Schemes that carry the mark of recognised standards — the Peatland Code, the Woodland Carbon Code, the statutory BNG metric — give companies a credible, auditable story to tell.

For the Ure Dales scheme, this matters because it is the kind of buyer demand that pays for restoration: buyers who want verifiable quality, long tenure, and a story to tell about the Yorkshire Dales.

What this means for Ure Dales

The scheme is being designed so that what it produces — healthier water, stored carbon, richer biodiversity — can be verified under recognised standards and sold to buyers who are paying for one or more of the reasons above. That is the logic underneath the Blended Finance Plan. Get the standards right, get the verification right, and the scheme has a buyer base with real obligations to meet, over a long time horizon.