Federated Hermes to launch UK nature impact strategy

Receives £30m from the UK government

Federated Hermes has teamed up with environmental impact investment advisor, Finance Earth, on the UK Nature Impact Investment Strategy, announced at COP27 on Biodiversity Day (Wednesday).

It is a blended finance strategy for the UK’s natural capital markets and will receive £30m from the UK Department for Environment, Food and Rural Affairs (Defra). It is expected to launch in 2023.

The strategy will invest into high-integrity nature-based solutions across land, coasts, rivers and sea in the UK and aims to accelerate recovery of nature and support key government targets like protecting 30% of UK land by 2030. It is also aimed at helping unlock infrastructure and housing developments and create skilled green jobs across rural areas and coastal communities.

Eoin Murray, head of investment at Federated Hermes, said: “Over £6bn of average annual investment is needed for the next 10 years for the UK to deliver its nature-related commitments.

“The aim of our UK Nature Impact Investment strategy will be to drive long-term sustainable returns for investors, whilst helping to accelerate the recovery of nature in the UK and support key targets and objectives set out by the UK government.”

Nature-based solutions are an exciting and developing part of the market for institutional investment, and a crucial part of achieving net zero, which we are embarking on through partnerships with the likes of Defra.”

Coordinating solutions

Another nature-based solutions announcement on Biodiversity Day was the launch of ENACT – an initiative between the Egyptian COP27 presidency, the German government and the International Union for Conservation of Nature (IUCN).

The ENACT (Enhancing Nature-based Solutions for an Accelerated Climate Transformation) initiative will coordinate global efforts to address climate change, land and ecosystem degradation, and biodiversity loss through nature-based solutions.

Egypt and Germany will co-chair the initiative while IUCN will host the ENACT secretariat and lead on implementation – part of which will be compiling an annual state of nature-based solutions report. These will be delivered to the COP presidencies ahead of future UN Climate Change gatherings.

According to a statement from the initiative, the report will provide the most comprehensive quantitative overview of global progress in implementing nature-based solutions commitments by both state and non-state actors.

The initiative aims to:

  • Enhance protection from and resilience to climate impacts for at least 1 billion vulnerable people, including at least 500 million women and girls
  • Secure up to 2.4 billion hectares of healthy natural and sustainable agricultural ecosystems
  • Significantly increase global mitigation efforts through protecting, conserving and restoring carbon-rich terrestrial, freshwater and marine ecosystems

Dr Bruno Oberle, IUCN director general, said: “While there is growing recognition of the potential of nature-based solutions for climate change mitigation and adaptation, global efforts across sectors have been largely disconnected.

“The ENACT partnership will strengthen coordination, ensure high-integrity nature-based solutions actions that follow ecological and social safeguards, and, crucially, quantify and track progress.”