Return
Return
Karma Loveday is a specialist journalist with over 25 years experience covering water and other regulated industries. She founded and is editor of The UK Water Report, a publication focused on policy, regulation and finance. Karma also works as water advisor to the Major Energy Users' Council, a membership body for industrial and commercial water and energy users.
Last month marked "the end of the beginning for EnTrade," its managing director Guy Thompson said, as its parent YTL tied the knot with Arup to launch the environmental market operator as a standalone company. But far more significantly, he said it also marked "the beginning of the end for business as usual" for everyone. For the relaunched EnTrade has a mission well beyond its own corporate growth – "the future of environmental recovery," Thompson shared.
EnTrade has partnered with Arup to take the nature recovery markets it has pioneered in south west England nationwide, and to accelerate private investment in green schemes in the face of the nature emergency. The occasion was marked by a launch event in Bristol last month.
EnTrade has proven itself in the Bristol Avon and Somerset catchments, channelling £1.3m of private finance through its platform to support 94 hectares of nature-based projects. It matches buyers of green services – such as developers who need to increase biodiversity or protect water quality to secure planning consent – with farmers and land managers who can provide them.
Under the new partnership with Arup, the plan is to scale up and roll out such markets across the country, underpinned by a new, easy-to-use and transparent digital trading platform.
Vikki Williams, digital water leader at Arup, commented: "Our partnership with EnTrade and YTL has come about through our shared ambition to accelerate green economic growth and infrastructure development. We are proud to bring the digital and market design expertise required to build an online marketplace that will underpin EnTrade's role as a high integrity market operator."
The partners are in the advanced stages of launching at least two new regional nature markets, with others set to follow.
The cause is urgent. The UK is one of the most nature depleted countries on Earth and faces a nature finance gap of at least £44bn per year. That sits in the broader context of a $700bn global funding gap, to heal the damage and restore the vital ecosystems everyone depends on. "Globally, that's quite some market", Thompson said at the launch.
In a blog on the new partnership, he pointed out: "But this isn't just about protecting fluffy animals or scenic landscapes. It's about securing our future. A nature positive, net zero economy isn't a utopian dream: it's a necessity, and scaling up investment in nature's recovery is the lynchpin."
He argued: "Nature is in crisis and we need a fundamental rethink on how we fund nature recovery. EnTrade has been at the forefront of thinking about how well-designed and regulated markets can efficiently deliver verified environmental improvements"
The great news is both sides of the market exist. There are willing buyers with money in their pockets, including those like developers who are now required to boost biodiversity as a condition of building, and a growing number of environmentally conscious corporates who want to act voluntarily.
There are also sellers who have investable natural projects, or the potential to develop them. These include farmers looking for new commercial opportunities or to diversify their funding streams, and environmentally concerned landowners looking to do their bit. The Land Use Framework envisages 9% of agricultural land in England may need to be converted away from food production to deliver dedicated environmental and climate benefits via, for instance, tree planting and habitat restoration, to help meet the Government's net zero and nature targets.
The challenge is how to bring the two sides together, introduce them, and give each confidence that it can trust the other. That's where EnTrade comes in.
Speaking at the launch, YTL UK group chief executive Colin Skellett credited the germ of the idea to King (then Prince) Charles, who suggested water should work more closely with farmers to help nature. That has now been happening in one form or another for many years, but it took Thompson's leadership to turn the EnTrade concept into a "real business," Skellett said, and to develop "a platform for the efficient deployment of private capital to achieve nature-based solutions".
Some years later, EnTrade has proven itself as a reliable and trustworthy market operator. It has robust governance and a legal framework to ensure delivery and monitoring over each project's lifetime.
A number of small farmers were featured at the launch event, sharing their experiences of using EnTrade services. One, who had used funds channelled through the platform to develop a wetland, said "private finance enabled us to do the right thing". Another involved farmer mulled that "there will be tens of thousands of me out there," keen to access new funding streams for nature projects.
EnTrade also shared the example of property developer Abbey Manor Group, which recently purchased credits which helped it to secure planning permission for one site, and to progress a further 100 house development near Yeovil.
Thompson said the nature recovery funding gap can't possibly be financed by the public purse alone, "and why should it?" High integrity markets, he said, offer a fair and efficient way of channelling private finance in. "Markets shouldn't be a replacement for regulation...these markets are tools," he clarified. With Arup's digital expertise now on board, EnTrade can manage the complexity at scale.
Using private finance for nature had a lot of supporters at the launch event. Joanna Lewis, chief executive of Wiltshire Wildlife Trust, which has partnered with EnTrade to work alongside involved farmers, argued that if nature-friendly farming is to be normalised, small farmers in particular need private finance to be available.
Environmentalist and chief executive of green investor Menhaden, Ben Goldsmith, declared himself "a real superfan" of EnTrade and championed the idea "that nature does things for us that's worth money". Tackling those who argue it is philosophically wrong to attach financial value to the benefits provided by nature, Goldsmith said that approach leaves nature valued at zero. Moreover, he said, there is a "real cultural shift" underway to value nature more – from nature prescribing for health and wellbeing, to public excitement over the return of storks to Sussex or beavers to the Bristol Avon. Environmental markets have developed "bottom up", he pointed out – "growing up out of nowhere...they were inconceivable ten to 15 years ago".
Kerry McCarthy, MP for Bristol East and energy security and net zero minister, agreed that it is imperative to get private money into nature, and to keep it there given schemes with commercial value will be maintained and sustained. Referencing the need for climate adaption in particular, she said carbon markets and nature markets are "indivisible".
She shared that the UK is keen to step up, "potentially to be the green finance capital of the world" – and on that basis, she praised that Arup and YTL had come together and shown leadership.
McCarthy also referenced the Government's growth mission, which is highly relevant here. While EnTrade's core driver is nature recovery, its services will undoubtedly be of high value as the country tries to grow ambitiously but sustainably.
It was, McCarthy argued, a "false narrative" to pitch economic growth against the protection of nature. Moreover, citing as an example that solar farms can be created in a way that is sensitive to biodiversity, she said the net zero mission "does not have to be at the expense of nature" any more than the growth mission.
The Government is exploring ways to enable growth while protecting the environment. It has recently announced plans to set up a central Nature Restoration Fund into which infrastructure developers – for instance of energy, water, transport or digital infrastructure – will pay to make good any environmental harm they cause. This will be used as a central resource to fund nature recovery projects at scale. Under current rules, such developers are required to mitigate or compensate for harm on a project-by-project basis, before they are granted planning permission.
The Government said the new system, to be introduced via the Planning and Infrastructure Bill this year, would speed up development while enabling strategic nature schemes to be progressed.
Wiltshire Wildlife Trust's Lewis reflected this "could be a positive step in the right direction" if done well and with strong governance. She remarked that it would be wonderful if the Government would harness EnTrade to oversee the rollout of the Nature Restoration Fund.
Returning to the job immediately in hand, Thompson said this next chapter for EnTrade is "something so much more" than a relaunch; it’s about kickstarting environmental recovery. We can't, he said, afford to continue with an approach that progresses project by project, regulation by regulation. The mission calls for pace and scale.
Clearly, this won't be plain sailing. As EnTrade goes nationwide, local stakeholders including prospective buyers and sellers of green services, will need to be introduced to its concept and gain trust in it. At the bigger scale, Skellett shared frustration that some regulators "still don't get the idea" – or at least are not acting supportively – in sometimes continuing to favour the certainty provided by concrete and chemicals over more multi-beneficial, albeit perhaps less certain, green solutions.
But Thompson's blog leaves no doubt of the ambition and commitment to foster real change. He reflected: "This is just the beginning. The real work starts now. Our ambition is clear: to unlock thriving nature markets across the UK and contribute to the creation of high integrity environmental markets as a driver of nature recovery."
"This isn't just a launch; it's a call to action. We're not just building a business. We want to pioneer a new sector in environmental services: empowering diversified farm businesses and conservation organisations to adapt and thrive. We want to see businesses building resilience to climate shocks and food security risks. And we want to be part of a whole new ecosystem of cutting-edge digital tools and providers that will revolutionise how we measure, report and verify environmental outcomes."
"At EnTrade, we're not just participating in the future of environmental recovery - we're creating it."
Karma Loveday
March 2025
