Life insurance and pensions company Scottish Widows has called for the establishment of a UK regulator for CO2 offsets, which would aim to set high-quality standards, address the nature financing gap, and support decarbonization actions and nature preservation.
Tony Juniper, Chair of the non-departmental, UK government-sponsored body Natural England, said the creation of regulated standards for nature-related carbon offsets can unlock private investments into nature recovery, Responsible Investor reported.
“If such standards were owned by the government and accredited by a relevant agency, this would act as an important accelerator, giving investors confidence in these nature-based solutions,” Juniper said.
He added that some CO2 offsetting initiatives in the past have actually harmed nature, for example by planting non-native trees or by reducing the ecosystem biodiversity through monoculture planting. Instead, he argued, experts need to find ways to combine the pursuit of CO2 benefits with other nature-related benefits.
As examples of such nature-related benefits that can be achieved, Juniper cited improving water quality, reducing flood risk, creating environments that are open to the public to enjoy for health and well-being reasons, and restoring depleted biological diversity.
Scottish Widows also proposed ways in which fellow pension funds can support action to tackle biodiversity risks. The recommendations included assessing portfolio exposure, and backing up corporate engagement and transformative action.
Scottish Widows also published a separate paper on March 14 that detailed the insurer’s efforts to support industry-wide action to limit deforestation in pension portfolios and supply chains.