the world of Green business


The challenge

Green business, like environmental management, is not a single, simple sector. Rather it is made up of parts of different organisations with a broadly similar purpose – to invest in or provide resources for improving nature and the services we get from nature.
There is increasing focus within the worlds of finance and investment on sustainable investments, with a plethora of terms used for different aspects of this, such as responsible investment, greening finance, financing green, and impact investment. For a good introduction to these terms and the wider context of green business or finance, we recommend “Demystifying Green Finance” from the Valuing Nature Network.
There are a number of different ways to resource your scheme, from grants and subsidies through to investment programmes. Some of the broad categories are:


Money given to support a project as a lump sum or fixed term of payments. These could come from the public sector or from philanthropic funders for instance.


Per unit money given to support a project or outcomes, such as CAP.

Partnership or match funding

Money and resources given as a fixed part of the funding needed (e.g. up to 50%)

Green bonds

These are a specific financial approach that allows the project to gather up-front finance in return for cost savings or returns in the future that have value for investors looking for environmentally beneficial projects.

Green finance/green investment

Green bonds are a part of this, but other financial vehicles also exist to provide investment into environmentally beneficial projects in the expectation of returns later.

Philanthropic investment/impact investment

Some investors aren’t looking for financial returns but instead measure success by other metrics such as social participation or ecological improvement.

Corporate Social Responsibility programmes

Where companies chose to fund schemes to play a responsible role in society

Mandatory Commitments

Where companies and other parties have to commit to improving the environment in return for the degradation they cause. A major source of funding in the Arc is likely to be the Biodiversity Net Gain (BNG) commitment where any developer has to ensure that their development actually improves local habitats for biodiversity to flourish by at least 10%. Some climate change schemes may fall into this category.

Payments for Ecosystem Services (PES)

Payments for Ecosystem Services (PES) are where your scheme or actions can be shown to be an environmental service you can provide on behalf of another company. For instance, a water company may pay a landowner to manage their land in a way that reduces water pollution, which in turn saves the water company money. An increasing number of PES schemes operate around the country. Most use some form of auction to allocate schemes to landowners willing to participate. PES schemes are not for everyone, they can be limited in scope and scale – that is, they do not operate everywhere and your outcomes and the outcomes the investor wants need to match.
Something that sits between the ideas of CSR and PES could be relevant if your scheme can benefit local businesses – for instance by mitigating local climate change risks (by soaking up local flood water before it affects the business property), or by providing local employees with a site for tranquillity and a greater connection to the local environment. If you can show how your project could help local employees the company may be more willing to support your project do this.