Caroline is an Associate Director in the Environment team at Osborne Clarke working with clients from a wide range of sectors on all aspects of environmental and sustainability law, with a particular focus on natural capital.  

Caroline’s principal areas of expertise includes environmental aspects of complex corporate and real estate transactions, waste and bioenergy projects, infrastructure projects, climate change and sustainability regulation and waste producer responsibility law. 

Creating legal agreements that foster balance and fairness is no small feat, especially when it comes to an emerging field such as Nature Markets. Nature Markets are set up with the aim of ensuring that the environment is left in a better state than before, facilitating the buying and selling of units of ecosystem services for both mandatory and voluntary regimes. The EnTrade Nature Markets are set up to offer a variety of environmental credits, including nutrient neutrality and biodiversity net gain (BNG). EnTrade's role as market operator is central to the smooth operation of the market, including the key part it plays in facilitating the trading of the credits. But how does EnTrade create balance and ensure customer satisfaction when it is at the centre of conflicting buyer and seller interests?

Here's the challenge: there's currently no formal legal framework governing Nature Markets. Those creating the structure for a market should therefore refer to existing principles and standards, both from government and from industry bodies such as BSI. As lawyers, with the help of a multi-disciplinary team, we can create agreements that are fair and balanced, even in the absence of strict regulations.
 
To do so we bring together experts from various legal specialisms – for example commercial, environmental, planning, real estate, regulatory/commercial disputes and financial regulation – with a wealth of knowledge and experience. These legal specialists can ensure that specific legal or regulatory rules are adhered to, such as the amendments to the Town and Country Planning Act 1990 which introduce the mandatory BNG framework and set specific parameters for BNG credits to operate within. But the team will also be able to draw on other, related experience, such as the planning process and general commercial drafting principles. 

But it's not just about legal input; there are technical considerations and inputs that play a crucial role too. When creating the legal suite of documents for the EnTrade market the Osborne Clarke team worked closely with others, including those responsible for the market design and landowner representatives. By working with a diverse team, we were able to ensure that all aspects of the market process were considered.

While Nature Markets are in their relative infancy, publications like the BSI Nature Markets Standards and the principles for voluntary carbon and nature market integrity, published by the UK government in November 2024, provide guidelines for best practice. This includes by encouraging organisations to use credits only after minimising their own impacts and those of their supply chain partners, by ensuring high integrity credits are used and by measuring and disclosing credit use in sustainability reports. By being aware of market standards and voluntary government guidance, legal teams can draft documents that reflect these standards and principles while also seeking to meet all parties' interests.

Lastly, it's important to highlight that the EnTrade model plays a crucial role in balancing parties' interests. The independent market settlement process managed by EnTrade as market operator efficiently matches offers and bids, with any surplus being shared fairly among participants. Independent oversight is provided by the Environmental Markets Board, responsible for maintaining market integrity and transparency. This structure, supported by a robust suite of legal documents which is constantly revised as the Nature Markets landscape evolves, ensures that EnTrade can balance landholders' interests with the need for businesses to meet environmental requirements.

By integrating multi-disciplinary legal expertise with the EnTrade framework, we aim to achieve fair and balanced agreements for parties engaging with the EnTrade Nature Markets. The ultimate aim of all involved in this endeavour is to support genuine and lasting environmental improvements while also accommodating the commercial realities and challenges faced by all market participants.

Caroline Bush
Associate Director, Osborne Clarke
April 2025