Nature markets can provide farmers with an additional source of income, as organisations look for new ways to meet environmental goals. 

Through those markets, farmers and land managers can be paid for the environmental benefits their land delivers, such as carbon storage, habitat, water quality and natural flood management. These benefits can be measured, valued and sold as credits or units. 

This creates new opportunities to generate income alongside food production.

Many of the actions involved, such as improving soils, restoring habitats, managing water and supporting wildlife, are already part of everyday land management. 

The level of income a farmer can generate will depend on factors such as the suitability of the land, the outcomes that can be delivered, whether the farm is part of a larger project, the length of the agreement, and demand from buyers. 

Payments are typically made over time rather than upfront, and many projects combine different revenue streams, such as carbon, biodiversity and water, to create a more balanced and resilient return. 

As nature markets develop, it becomes increasingly important that environmental outcomes are real, measurable and delivered with confidence.  

At the moment, different approaches and methods are used across the market. This can make it harder for land managers, buyers and investors to compare projects and understand what ‘good’ looks like. 

To address this, the British Standards Institution (BSI), working with Defra and the devolved administrations, developed the Nature Investment Standards programme. 

In March 2025, it published the first standard in the suite: the Overarching Principles and Framework standard, known as Flex 701.  

Flex 701 sets out the core requirements for high-integrity nature markets. These include transparency, good governance, robust measurement and clear environmental outcomes. 

It is designed to give those operating in nature markets, such as project suppliers, nature credit buyers and other initiatives like crediting programmes, a consistent framework to work from, helping to build trust across the market. 

Further standards are available for biodiversity and nutrient benefits.

Together, these set out the specific requirements for these markets and help them operate in a more joined-up way.

The Evenlode Landscape Recovery project

The Evenlode Landscape Recovery project brings together more than 50 farmers and land managers across around 3,000 hectares in Oxfordshire and Gloucestershire.

The project is restoring and reconnecting habitats across the landscape, including floodplain meadows, wetlands, woodland and river systems, while continuing to support food production.  

Alongside this work, the project is exploring ways to earn income from carbon, biodiversity, water quality and natural flood management. 

At this stage, nature markets alone often do not cover the full cost of the work. Public funding through Landscape Recovery is still an important part of the model. It helps pay for delivery and running costs while the market develops. This reflects the fact that these markets are new.  

The Evenlode Landscape Recovery team joined Defra and BSI’s Early Adopter Programme, part of the Nature Investment Standards programme, to test how their project aligned with Flex 701.

For them, this was not about starting from scratch. It involved reviewing their existing approach, identifying any gaps, and understanding what future buyers or investors might expect. 

One challenge they identified was that the markets they want to work in, for example biodiversity, carbon and water, can feel fragmented.

The standards provided a common reference point across these areas. The team also considered how to be transparent in a way that is meaningful and proportionate, while protecting commercially sensitive information. 

The Early Adopter process helped the team define what good practice looks like in emerging areas such as natural flood management and soil carbon, where markets are still developing.

Alongside funding from Landscape Recovery, it supported work on governance and community engagement. It also helped them develop approaches that can be repeated and, over time, independently assured. 

For a project spanning multiple farms within one catchment, a shared framework has clear practical value. Actions taken by one farmer can affect others nearby.

A consistent approach across the project makes it easier for buyers to compare opportunities and increases confidence that environmental outcomes are credible. 

The pilot has also helped shape practical guidance and supporting materials for others looking to align with the standards.

This means the learning from projects like Evenlode can support others considering similar approaches to nature markets.

Watch the video on Youtube: https://www.youtube.com/watch?v=5Vg1-ObfsCA(In this video, the Evenlode Landscape Recovery project team explain how it used the BSI Nature Investment Standards Early Adopter Programme to test its approach to nature markets in practice.)

Interaction with government schemes

If you are considering entering a nature market, you should understand how this may interact with existing government agreements. 

You cannot sell an environmental enhancement that is already funded through an agri-environment scheme as a biodiversity unit for Biodiversity Net Gain (BNG) or as a nutrient credit for nutrient mitigation.

However, you may be able to deliver additional environmental improvements on the same land alongside an existing agreement, depending on what is already being funded. 

If you are considering Biodiversity Net Gain or nutrient mitigation alongside public schemes, GOV.UK guidance explains how these payments can be combined in practice and what to consider when establishing your baseline. 

Getting started

For farmers interested in learning more about nature markets, a first step is to understand what opportunities may be available on your land and how they could fit with your wider farm business. 

Defra commissioned the Green Finance Institute to provide free support through its Farming Toolkit for Assessing Nature Market Opportunities. 

The toolkit is designed for farmers in England and explains what nature markets are, what opportunities already exist, and the questions to think through before taking part.

It also sets out 10 stages that farmers may need to work through when developing a project, from assessing land opportunities and measuring outcomes through to working with buyers and signing legal agreements.  

Many nature market projects are developed with others.For example, through farmer clusters, cooperatives or larger landscape projects. That can help bring farms together, create projects at a scale that is more attractive to buyers, and share knowledge and costs across the group.  

If you want to explore this further, you can:

• read the GOV.UK guidance on combining environmental payments 

• look at the BSI Nature Investment Standards to understand the framework being developed to support fair and transparent nature markets.  

• explore how to apply the standards to your nature project

• read the guidance on how to sell biodiversity units on GOV.UK 

• explore how to get carbon credits in line with the Woodland Carbon Code and Peatland Code.