The UK’s biggest nature charities have released a set of principles for environmental “credits” to combat corporate greenwashing.

The Wildlife Trusts, RSPB, Woodland Trust and National Trust have published the guidelines on “nature markets”, which involve companies buying carbon credits, biodiversity units, nutrient credits and natural flood management payments as a way to offset their impact.

The Government, which aims to grow annual private investment in nature by at least £500 million by 2027, published its Nature Markets Framework in May and is working with the British Standards Institute to develop standards for green financing.

It comes as a lack of regulation for these emerging markets has led to the exposure of poor quality schemes and accusations of businesses using them to greenwash.

The charities said they have developed the set of voluntary principles for science-based investment to support high integrity natural capital markets in the UK.

They worked with Finance Earth and Federated Hermes – a global leader in responsible investment management – who will manage the Government-backed UK Nature Impact Fund that aims to stimulate institutional investment at scale in high quality nature restoration projects across the UK.

The charities said the UK Nature Impact Fund intends to adopt the Nature Markets Principles and apply them across all its activities in UK nature markets.

These include supply-side and demand-side criteria such as transparency, verifiability, and additionality, meaning the benefits would not have likely come to fruition without the provided capital.

James Alexander, chairman of Finance Earth, said: “These principles have been co-developed as a stop-gap to influence market practice today and to contribute to the much-needed emerging Government policy and regulation.

“The Nature Markets Principles have been informed by a range of credible UK and international sources, as well as the practical delivery experience of the UK’s leading nature charities whose aim is to support the development and long-term operation of high integrity, high quality and high impact UK markets for nature restoration and enhancement.

“Enshrined in the principles are the need for projects to be science-based, transparent and verifiable, ideally in perpetuity and benefiting local communities as well as society more broadly.

“There are also stipulations about who the producers of the credits will do business with, ruling out those companies dependent on environmentally damaging activities such as fossil fuel extraction.”

Dr Rob Stoneman, director of landscape recovery at The Wildlife Trusts, said: “Nature-based credit schemes present a real opportunity to restore nature and create regeneration and prosperity in the countryside – if done in the right way.

“Buyers must stand up to scrutiny and truly contribute to nature’s recovery in the UK, while benefiting local communities. We welcome the business community and others working in this space to join us in upholding these principles.”

Rebecca Munro, director of income and conservation investment at the RSPB, said: “We are in the middle of a nature and climate crisis, but we know that businesses want to have a greater role in being part of the solution.

“Well-regulated nature markets could be one way that we help grow business investment in restoring nature and responding to climate change, all whilst benefiting local communities.”