Why Trust is the Missing Ingredient in Nature Finance

Nature finance depends on more than capital: trust remains one of the biggest barriers to scaling this sector. Watch the Scottish Nature Finance Pioneers webinar to understand how insurance can help bridge the gap between ambition, investment, and delivery. 

The opportunity for nature finance

Scotland is emerging as one of Europe's most innovative natural capital markets with the groundbreaking idea that attracting long-term investment requires more than funding and demand. During a recent webinar hosted by the Scottish Nature Finance Pioneers, Will Butler explores why trust remains one of the biggest challenges facing nature projects and how specialist insurance can help bridge the gap between environmental ambition and investable reality. 

From peatland restoration and woodland creation to biodiversity enhancement and natural flood management, when it comes to nature finance in Scotland there is no shortage of ambition. Private investment is beginning to flow, new market mechanisms are emerging, and project developers are working hard to turn environmental outcomes into investable opportunities. 

Yet one challenge continues to sit at the heart of the market; one of confidence and trust.  

This was a recurring theme during our Founder and CEO Will Butler's recent webinar alongside the Scottish Nature Finance Pioneers. While much of the conversation around nature finance focuses on funding, policy and market demand, Will highlighted that long-term success ultimately depends on whether investors, buyers and project partners have confidence that projects will deliver what they promise. 

The biggest risk isn't nature 

Perhaps the most memorable moment came when he challenged a common assumption about project risk. 

"People think with nature that the biggest risk comes from nature. It doesn't. It comes from other people." Will Butler, Founder and CEO, GaiaSicura 

It's an observation that resonates across the natural capital sector. While ecological risks are often front of mind, many of the issues that threaten projects are commercial or operational. A baseline survey carried out incorrectly, a contractor failing to meet obligations, a landowner changing direction, or a business within the contractual chain becoming insolvent can all have significant consequences for project delivery. 

These risks aren't unique to nature markets. The difference is that nature-based projects often involve long-term commitments stretching over decades, which means uncertainty can become a significant barrier to investment. 

The trust gap in nature markets

One statistic from the webinar highlighted the scale of the challenge. Despite the growth of voluntary carbon markets, Will noted that only around 4% of carbon trades are currently insured. For a market that is expected to attract substantial private capital over the coming years, that figure suggests there is still a considerable gap between environmental ambition and the risk management structures needed to support it. 

The role of insurance, however, is not simply to add another layer of protection. 

Insurance should complement, not duplicate 

During the Q&A, Tom Ward from RSPB asked an important question: if projects already have buffer pools, contractual protections and other mitigation measures in place, are they effectively paying twice? 

Will's response was clear. Insurance should complement existing safeguards rather than duplicate them. Every project has its own risk profile, and the objective is to identify the gaps that remain once other protections have been accounted for. 

As he explained, "Carving out what's unneeded versus what's needed is a vital part of the placement process." No two projects are the same, and effective risk transfer requires solutions that are tailored to the realities of each scheme rather than relying on a standardised approach. 

Why Scotland is well placed to lead 

The discussion also touched on Scotland's distinctive position within the nature finance landscape. Unlike England, Scotland does not currently operate within a Biodiversity Net Gain framework, and many projects are structured around environmental services rather than tradable units or credits. While some might view this as a complication, Will took a different perspective. 

"I wouldn't say it's problematic. It just warrants a closer look." Will Butler, Founder & CEO, GaiaSicura.

In many ways, Scotland's willingness to explore new approaches is precisely what makes it a pioneer. The country has an opportunity to develop nature finance models that are designed around local needs and environmental priorities, while also attracting the private investment needed to scale restoration efforts. 

The next phase for nature finance 

As these markets continue to evolve, trust will become increasingly important. Investors need assurance that projects are resilient. Buyers need confidence in the outcomes they are purchasing. Project developers need mechanisms that help protect years of work from risks beyond their control. 

Nature finance is often discussed in terms of capital, regulation and environmental impact. All those things matter. But without market confidence, none of them can reach their full potential. 

Building that may prove to be one of the most important challenges, and opportunities, facing the sector over the next decade. 

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