Exploring nature’s future: rewilding, natural capital, and scaling nature-based solutions

There is growing attention on the role that rewilding can play in delivering a range of ecosystem services. Dynamic and forward-thinking individuals and organisations are working hard to demonstrate how to successfully deliver and manage rewilding projects at scale.

In this exclusive interview, we speak with Matthew Hay, a former Forest Carbon team member, who shares insights into what he’s learnt since joining Nattergal, a rewilding start-up focused on making nature recovery both impactful and profitable.

From the role of biodiversity in investment strategies to the importance of getting business models right, this conversation dives deep into the future of nature recovery and how we can make meaningful progress before time runs out.

You've had a few roles since leaving Forest Carbon. Can you share what you've been up to and how those experiences led you to your current position at Nattergal?

When I left Forest Carbon, I joined Bidwells - a large land agency - to help their Scotland division build a natural capital team, advising their clients on environmental land management and emerging nature markets. For personal reasons, my wife and I had to move south to England late last year (2023) and I was lucky enough to be able to join the Nattergal team off the back of that move, as my new home is in the sweet spot between the three Nattergal-owned sites in the East of England.

Can you tell our readers about Nattergal's aims and ethos? 

Nattergal is essentially a rewilding start-up, with a mission to make nature recovery profitable, so that it becomes an investable proposition for the private sector and can scale. Our philosophy is very much ‘nature-first’, though - we’re targeting biodiversity, not carbon and wherever there is a trade-off between climate and nature, we want to do whatever is best for the latter.

How has your experience with carbon sequestration projects shaped your approach to natural capital investment?

Carbon markets were once described to me as the backbone of natural capital - the original and most readily applicable form of green finance. For me, like others, they were my introduction to natural capital as a practical concept, and my knowledge of their practical functioning has enabled me to develop a career in this sector.

More than carbon markets, though, I sometimes think the most valuable experiences I ever had were driving around the Scottish Borders with James and George Hepburne-Scott, talking to landowners and learning about the risks and practical challenges faced by those on the ground; those actually trying to deliver projects for nature and climate.

How do you see the integration of natural capital and biodiversity into mainstream investment strategies evolving in the coming years?

I think the world sits at a knife-edge when it comes to investment in nature and climate. There is a real ambition to do lots, and quickly, but it will require governments to roll up their sleeves and be willing to create the demand that is required for markets to function efficiently and effectively. 

That said, growing investor desire for asset managers to deliver positive ESG outcomes will likely see continued flows of capital into projects that deliver for nature and climate. The question is, will these ever be enough?

What, in your opinion, are the key challenges and opportunities for scaling nature-based solutions in the UK? 

The key challenge is the demand for the outputs of nature-based solutions (NbS) projects. When I started at Forest Carbon, demand outstripped supply, meaning land managers had high confidence they would be able to access carbon finance. Now the situation is reversed and we’re starting to see a contraction in parts of the sector as a result, because some who bet big on continued price rises within the voluntary carbon market are struggling to realise the returns they’d hoped for.

Another challenge is ensuring that natural capital markets actually deliver for nature. Again, the situation has flipped from pre-2020, when landowners primarily accessed carbon finance to help them fund woodland creation or peatland restoration. Now, most landowners are creating woodlands or restoring peatlands to help them access carbon finance. Focusing solely on farming carbon credits and maximising Woodland Carbon Units (WCUs) generation is unlikely to result in a truly biodiverse woodland. Instead, it risks producing a monotonous, uninspiring plantation. We have to make sure the tail doesn’t wag the dog!

But the opportunities still exist to make this sector truly transformational in its impact. I’d like to see continued moves away from voluntary markets to regulated ones, like Biodiversity Net Gain and the expansion of the UK Emissions Trading Scheme, as well as nature markets expanding beyond terrestrial habitats. I’d also like to see new business models emerge that focus on resilience and leverage recent developments in insurance and normative accounting - there is more to NbS than just turning everything into credits!

If these business models can prove themselves, we’ll start to see big flows of capital into nature recovery and natural capital because investors will love the fact that their money is making the world a better place, while generating a return. I just hope that in today’s fractious and polarised society, we can build the necessary coalitions of the willing to make it all happen, and soon, because we haven’t got long left to change course!

Nattergal’s recent £40m seed funding is a significant milestone. How do you see this investment accelerating efforts in natural capital, and what are the key areas you’ll be focusing on with this new backing? 

Closing our fundraising round is a good signal to the market that investors have confidence in natural capital-based business models. Our challenge now is to make sure that the business model delivers returns and proves the concept so that we can raise more in the future, and start to really scale our nature-recovery plans.