From Regulatory Burden to Business Opportunity: Mastering Biodiversity Net Gain

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My takeaway for developers, or, or biggest tip would be to just start thinking about biodiversity as early as possible. I know historically ecologists used to be dragged in at last minute to sort of tick a few boxes, but those days are long gone.

Welcome back to Sustainability Solved, where we'll be helping you and your organizations to turn environmental challenges into business opportunities. I'm Will Richardson, founder and Chief Purpose and Innovation Officer at Green Element Group, and as ever, I'm joined by Charlie Luxton.

Hello, Will, how are you?

I'm really good.

I feel like it's like I do buildings. I, you know, anyway, it's lovely to be here. It's been an interesting week, hasn't it? As ever, every week seems to be interesting at the moment, doesn't it?

Yeah, sometimes worrying, worryingly interesting. But I wish it wasn't so interesting, to be honest with you. But there's been some really good stats that have, I think, come out on the back of what that idiot's doing in the US. I think What what is happening is we are really seeing gosh I'm really making myself UK centric aren't I as a podcast maybe we shouldn't have that in the intro what well we've got a load of American interest we have loads of Americans that do listen to it and so I don't think they're voting for the orange man whatever way you want to think about it will I think look what the orange man is doing what he's doing the orange man has just said you can start Logging 280 million acres of American national park and woodland.

So I think the orange man deserves any slack. You know, anything.

So I think we can leave it in.

We can leave it.

We can leave it in.

We're leaving all of this in, Will. Don't you understand? This is just. This is called behind the scenes. It's how stuff's done now, you see. But you know, that's interesting because there's been there has been some pretty eye-opening stuff in the news, but also some really good stuff. about the role of the green sector in growing our economy, which is growing at triple the rate of the rest of the economy in the UK. And I know that in China, 10% of the Chinese economy now is renewable energy, batteries, PVs, wind turbines, 10%. I think it contributed some ridiculous, like a third or half of their growth last year was from that sector. I mean, it's absolutely—

To be fair on China, they implemented that about 15 years ago.

Yep.

I mean, it was a long time ago that they implemented that strategy. So they already knew what was going on back then.

Yeah, I mean, then, then, you know, the problem is that they, they can make a decision and follow it through. They can make a grown-up decision and they can follow it. There's lots of issues with that country, don't get me wrong, absolutely 100%, but they— for long-term vision and delivering on strategy, you can really see the benefits that's paying off for them. It's what we need to do in this country. And, and having people like Farage banging on about the cost of net zero with seemingly Hard to justify figures. You know, it's a slightly more nuanced and tricky thing to solve, isn't it?

No, no, absolutely. I think the fact that the environmental sector is growing three times faster than any other sector just says it all, really.

Yep. Take that in your pipe and smoke it, Mr. Mr. F. Anyway, should we try and be a bit more grown up now? So today's guest is well, I'm really excited about today's guest actually, Emma Toovy. She's from the Environment Bank, which is an organization that looks to create biodiversity. And it's basically come out of the new Biodiversity Net Gain initiative, which is a way of understanding impact of development on land and ecosystems and analyzing that and then creating more biodiversity should you impact biodiversity wherever you're building.

Yeah.

It's something that we deal with quite regularly, quite a lot in what we do, and it's been one of the few areas that I've felt really positive about, actually. I'm really excited. I did quite a lot of work with charities who are very excited about the sustainability, nature charities. They're really excited about it. I think this could be a really good sector of our economy that's coming down the line. So I'm really keen to hear more about what she's got to say.

I'm a trained ecologist, so my passion lies in nature and wildlife and really I didn't come from a particularly nature-focused family or background, but what I was inspired by as a kid was those biology field trips, those geography field trips. I don't know if you went on one yourself, but I lived in the suburbs of Reading, and getting out and about into the wet and windy Wales or down to Devon and just experiencing and connecting with nature, clinging on to the sides of rock pools, measuring limpets, and learning about oxbow lakes, all of that, it just really inspired me to get into the nature space. So I've been really working as an ecologist for over 20 years, and I went into consultancy first, so really working with developers, which might seem like an odd choice for an ecologist that's passionate about nature, but actually I always felt that it was a brilliant place to be to influence and deliver high-quality developments that minimize their impacts on nature. So that's what I did for a good 20 years in consultancy, out surveying, looking for newts and bats and reptiles and all of those things, and designing mitigation schemes that tried to minimize impacts on biodiversity through the planning process. And really, in doing that, I— after so many years in that profession I realized that it wasn't quite working, and there were definitely challenges and things wrong with the system itself that were leading to this continued and increasing decline in biodiversity. And we're seeing that now as UK is one of the most nature-depleted countries in the world. So that's when I took a step change, a complete change, and moved to Environment Bank, which is the business that I'm in now. I've been there 3 years, and I'm Chief Land and Nature Officer. So really, I'm responsible for the ecological integrity of and soundness of what we do as a business.

So what was it about the process that you've been involved with for 15, 20 years, working with developers, trying to walk that tightrope between what they want and what's best for nature and what the planning system wants? And what were the kind of— what are the main criticisms you have? I mean, clearly it's in the news massively at the moment with bat tunnels on HS2 and Newts and seemingly the, the government of the day, sort of, yeah, turning their ire a little bit, or certainly questioning the system as it stands.

Biodiversity is intrinsically complex. We have thousands, if not millions, of species, so many different types of habitats, and there was no real framework for the planning and consenting regime to address those consistently. So obviously we had the environmental impact assessment requirements, and there have been quite a lot of legislation around protected species in particular, but habitat loss in particular was quite difficult to address. It was really based on professional judgment. Each local authority across the country was dealing with it in a slightly different way. There was no concise and clear and predictable certain framework with it, with which developers could address habitat loss in particular, but also do it consistently and not feel like if they were doing it in one local authority, they'd have to do something different if they were then building a development elsewhere. So I think that lack of consistency and the fact that it was based a lot on professional judgment meant that everyone has an agenda, right? So a developer has an agenda, a local authority, even the ecologists, and it became a bit of a— there was, there was always room for a compromise, and often biodiversity became the least priority. And that always meant that there was a continued decline, and the actual compensation for habitat loss was never actually being delivered on the ground. And that's where, whilst there may be some criticism of the new biodiversity net gain regulations, That's what it sought to deliver. It sought to bring in certainty, clarity, and predictability into the, into the planning process in terms of dealing with habitat loss, ongoing systemic habitat loss across the country from development.

So this is the biodiversity net gain strategy then? It's just because traditionally it has been effectively newts and bats, unless there's something very specific, a badger or—

Indeed, yeah.

Whatever. And as you say, from my personal experience, you might have one ecology officer who's very focused on bats and one who's very focused on newts, and they have completely different desires. But I think what you're saying, and what I have enormous sympathy for, is what actually fell between the cracks on that was the, the kind of the stuff of life, if you like, the, the habitats that we were slightly destroying. So BNG, biodiversity net gain, is about analyzing the kind of complexities that are on a site, or the nature potentials on a site, and sort of giving that a score almost, isn't it? Giving it a sort of a value judgment that should be consistent.

Yes, that's exactly it. So the regime came in formally just over a year ago, actually it was February last year, but it became— it was given Royal Assent as part of the Environment Act, which was a 2021 Act, and that requires developers to deliver at least a 10% net gain or positive uplift in the biodiversity value of a site post-development. So what, what that means in reality is that a developer or their team of consultants. Most, most will have, have the need for an ecologist to essentially survey and assess the biodiversity value of a site before development and then predict the biodiversity value of a site after development. And then the residual, the difference in biodiversity value, needs to be addressed in some way. And also you need to put a 10% net gain on top. Historically, that would have been really difficult to do if you're relying on professional judgment. But actually, what we have now is a government-backed metric, which is called the biodiversity metric, which sounds very grand, but it's simply an Excel spreadsheet, which we love. And it gives a score. So there's a score pre-development and a score post-development. And so it's quantitative, like it's the first time that developers and consultants have been able to put numbers down and tangibly essentially quantify biodiversity value and ensure that they're delivering an uplift.

And how long have you been doing this for? How long have we been doing this biodiversity net gain?

So in the sort of policy context has required a no net loss position for some time, actually well over a decade. So it's taken you to that neutral position, making sure that the developers are always compensating for loss, but they haven't been— had to use a metric. So the metric only came in a year ago formally, and it's only for planning applications that went in on or after that date on the 12th of February last year that this new regulation applies and that this metric is actually now having to be used.

My next question was, does it work? But we're too—

yes, how good is the metric?

Yeah. I think it's too soon to see, isn't it?

It's definitely too soon to see. I think the reality is that biodiversity, as I said, it's so complex and simplifying it down to an Excel spreadsheet for some is horrifying. But I think the reality is that without it, you have nothing really. You have so much inconsistency, so much unpredictability. And the metric itself has been developed actually over the best part of a decade. There's been scientists, government officials, planners, ecologists, developers feeding into this metric. It's had many iterations, and it builds in risk. It's very clever. It's well thought through. It thinks about habitats not just in terms of what's going on on the ground in terms of coverage, but also the quality of habitats, what condition those habitats are in, how difficult they are to recreate, all of those kind of risks are built into the metric, and it's actually hailed internationally as quite a special thing. So yes, it's not going to be perfect, but I think it's the best thing that we've had in this system for a very— well, ever.

And do you think it provides that consistency? Because it strikes me that that's a really critical part of this process, isn't it?

Yeah, absolutely. I think so. Developers, ecologists, local authorities, Landowners, we all use the same metric, and that's so key. That agenda, that judgment, that bias is removed because we're all using the same tool to make our decisions, which is really powerful, I think.

Okay, so you're doing a development. Let's say you can say there's no loss of biodiversity on this project, but there certainly isn't the 10% gain that is now mandated. What happens in that situation?

So it's really important that developers adhere to what's called the BNG hierarchy, which is essentially a mitigation hierarchy. And that means that there's a series of steps that a developer needs to go through to help address what their impacts are and ensure that they're compliant with the new regs. So the first of all, first of all, they have to avoid as many, as much biodiversity impact as possible that's reasonably possible. But ultimately, of course, if you're developing and building houses or infrastructure, you will— there will be an element of habitat loss in most circumstances. So the next step is to minimise that loss. So yes, there's going to be some loss, but try and minimise that as much as possible. Then developers need to seek to enhance any opportunities to deliver more biodiversity on the site. So it might there may, there may be a loss, but there may be also an opportunity to improve existing habitats on the site that's being retained. So that's the third step. And then the final step is to look for solutions off-site. So whilst the absolute ambition is to, to try and deliver a balance of biodiversity and even an increase in biodiversity within the Red Line, in many cases that's just not possible. So an off-site solution is, is the next best thing. That's where a developer can seek to deliver an off-site solution themselves, or indeed they can purchase what are called biodiversity units from an off-site provider, a habitat bank provider. So these are businesses like Environment Bank, one example, where we're delivering landscape-scale nature restoration projects all across the country, and essentially the developer can purchase the uplift delivered by them In order to meet their biodiversity net gain requirements and meet their planning requirements.

So just so you know, Will, the red line is the boundary of a development unit. We all talk about red lines a lot, don't we? And get very excited and obsessed by red lines. Everyone's going, what? What is it about the red line?

The cynic in me, probably cynical because I listen to the news and we listen, like, Boutique construction companies will probably adhere to the guidelines. Let's they probably that, but the massive house builders will they? Do they? I mean, I'm I live in an area where we are massively under development, so I can see how much of the farming fields have been taken up by houses, and so I can visualize this biodiversity. Definitely not net gain. Like, would— do they actually take up this offsite stuff? Like, would I be able to contact them and say, I'd like to learn more about it as someone that's, I don't know, that wants to know more?

Yeah, I mean, fair enough for being cynical, but I would actually say the big house builders are those that are embracing it the most. I'd also say that this is primary legislation now, so previous policy context, this sort of requirement for no net loss, it was policy, so there's always an element of discretion around the delivery of policy, certainly at the local level. This is primary legislation, there's a statutory requirement to meet these obligations, and so there's a lot more scrutiny around it being delivered. And it's a pre-commencement requirement as well, so no spades in the ground until they're able to demonstrate not just that, not just how BNG is going to be delivered, but also the governance that sits around that to ensure that in time they can report and demonstrate that actually has happened. So that's good, and I think that's really important to just flag, is that the biodiversity net gain regulations and this robust governance that wraps around it, that's unique, and it's something again that's hailed internationally as something that's very robust, and it provides foundations for other potential nature markets, which we'll go on to, I'm sure, shortly. But it is— it's got a really strong governance around it that makes sure— obviously we will see how it's implemented, but the spirit of the legislation and the market infrastructure that wraps around that means that it's super robust. But actually, yeah, developers, housing developers in particular, they're embracing biodiversity net gain because I think they also recognise Well, one, they like the predictability and the certainty that comes with this metric. It means that they can plan and they can cost and they can work out what the impact of that's going to be really early on in their feasibility process for developments. But also there's a lot of building green infrastructure and high-quality public realms and building nature into housing developments in particular is shown to add value, you can, in terms of price, house pricing, but also it's what residents want to see. You will all know how people have been craving more access to nature, particularly since COVID for example. People do want to see green and greenery, nature, access to nature within the development schemes themselves. And big house builders, they know that, they can see that, and this is actually a mechanism to deliver that, but also meeting some wider environmental objectives as well. So you could have biodiversity net gain on site, which also is delivering in terms of flood retention. It could also be delivering in terms of public access to nature, sports fields, and health and wellbeing, sustainable infrastructure, cycle paths, all of those things. It helps them to tick a lot of boxes, if you like, and create these sort of multifunctional spaces within housing. So I'd say actually the big developers are the ones that are embracing it a lot. I think the smaller developers are the ones that have a bigger challenge to deliver probably on site sometimes because they have less space and probably have less resources to sort of navigate this new regime as well.

Interesting.

And just so, who does this affect? Obviously, I'm digging up a field and putting in a load of houses, or I'm making But actually HS2 doesn't have any requirements, does it, to do any biodiversity net gain, brilliantly, but unless I'm doing a road or rail infrastructure, what happens if I'm cutting down the woodland or if I'm digging up a field for rock, you know, I'm starting a quarry, who does this cover?

So the new biodiversity net gain regulations covers almost all development, so as of February last year, everything apart from very small-scale development and self-builds is covered. It's— there's very few exemptions. Um, NSIP, so nationally significant infrastructure projects, they, they aren't covered yet, but they will be, um, this year. So really it's across the board, really.

Farmers? If I'm a farmer and I take a field that's a wildflower meadow and I decide to plough it over to make a to grow some rapeseed, for example, would I be— would that cover me?

So, I mean, that's a great point. So any— anything that needs— requires planning permission. So if there is a change of use, or indeed activities from farmers flags the need for an EIA, then it would get picked up then.

EIA?

Environment Impact Assessment.

Perfect. Brilliant.

But only— it's only for those land use changes that are subject to planning permission or consenting in some form. So under the Town and Country Planning Act, or indeed Development Consent Orders for nationally significant infrastructure projects. Sorry, the acronyms are coming out now.

I'm trying not to use them. They're there for a reason. But yeah, absolutely.

Yeah.

Okay. And also, Will, I think it's important to remember that this has only been going since February, so a lot of the— a year and a bit. So a lot of the permissions that come under this remit haven't necessarily even hit the ground yet. So—

Yeah.

And this is part of the issue, is that there'll still be another 5, 6 years of, you know, land-banked projects that they would try and make meaningful starts on to hold, not having to do the uplift. Although they have tightened up regulations around what a meaningful start is. So if I get a planning application from 3 years ago, it used to be if I put in a couple of roads and dug a bit of drainage, I could say I've made a meaningful start and I would then not have to hit the BNG requirements, biodiversity net gain requirements, or any of the other uplifts in building regulations. But quite wisely, the government have got smart to that and you have to genuinely build like the whole first floor of a housing development to have made a meaningful start. Because there's a lot of game. The problem with these systems, isn't it, Emma, is that as soon as you make rules, people game the rules. And there's endless amount of gaming going on in these situations, isn't there?

Indeed, yeah. There's loopholes being exploited, I'm sure.

Well, that's good because you just saved me a load of time because I was just about to write off to all of our housing developers in my area. I don't need to now.

Okay, so I've tried everything I can. I've followed your sort of cascading rules of not trashing it, Making it better on site, blah, blah, you know, all of that.

Yeah.

And then I get to a point of I can't do what I need to on this site and do my development, and the planning system says, fine, you've tried everything reasonable.

Yeah.

Now you need to, you need to put your biodiversity net gain, your BNG units, somewhere else. And that's where Environment Bank comes in, isn't it? And, and other providers.

That's right.

Yes. So how does that process work?

Yeah, so we're an offsite provider only. So what we do is we have a growing portfolio of nature restoration projects. They're essentially kind of large-scale nature reserves all across the country. We take low biodiversity value land, usually agricultural land that's been intensively farmed. We try and locate them in areas of strategic value for biodiversity, so perhaps they connect up wider areas of biodiversity value in the landscape. And we design these incredible nature restoration projects on them. We forward fund all of, all of our projects, so we're actually private equity backed, which means we have access to investment, which we cost out all of our projects from day one, and we're able to secure that funding and lock it down. So it means that everyone can be confident that the money's in place for these projects to be delivered. So we have a big team of ecologists, they design these incredible habitats over the site. We work closely with the landowners themselves, so we don't buy land, we actually rent— take a long-term lease out on land. We work with our rural landowners to design and then manage the land for biodiversity. We can predict what the biodiversity outcomes are in 30 years' time, and I'll explain why it's 30 years' time in a minute. We can measure the number of biodiversity units that can be generated from that site. Typically, we'll have lots of species-rich grassland, we'll have woodland and ponds, areas of scrub, even traditional orchard, a whole range of different types of habitat we'll deliver within these landscapes. We're able to measure what the biodiversity uplift or the increase in value is, and we can package that up into what's called biodiversity units that can be sold off the shelf essentially to developers so it can meet their planning requirements. So the 30 years is something that's in statute, so that's part of the regulations for biodiversity net gain to be delivered in a compliant way. It has to be secured, bound to the land, and managed for at least 30 years to be compliant, which is a question that we get all the time— why 30 years? But it's a meaningful amount of time to deliver good outcomes for nature. But also it's enough, it's a kind of timeframe that you can cost out, you can affordably deliver and secure funding for 30 years. And it's something that a landowner can get their head around. So it's a balance of sort of practicality and meaningful outcomes for nature.

Do I do it? I'm making an assumption here that at the end of that 30 years, there would be a development clause effectively that if you wanted to build on that land, you would require planning and therefore you would have to do a 10% Let's assume the same regime's in place, a 10% uplift on the uplift you've already gained. So it effectively sort of locks itself into in perpetuity use, doesn't it, because of what you've established on the site?

Yes. So after the 30 years, there's a bit more freedom around in terms of it no longer being required to follow the exact parameters that are sort of agreed for biodiversity net gain. But you will have these incredible habitats on the site. You couldn't build on them unless you go through that planning process, and exactly, it would probably be not a particularly desirable site for developers to build on because of that BNG burden, if you like. In many cases, a landowner or an operator would look to actually re-baseline and go again so that they can secure funding for another 30 years and drive even more outcomes for nature from that piece of land. So I think that that's a question we get asked a lot. Well, what happens? Will the— we know, will the farmer just dig it all up? And it's— it would be highly unlikely that that would be possible.

And you alluded to the fact that smaller organisations, property developers, would find it harder. Can you give us some examples of what sort of stuff that they could do?

Well, I would say actually these off-site solutions. So there we referred refer to them as habitat banks. And having local habitat banks is actually an enabler for smaller-scale developers. So big, big developers, big strategic housing projects where you have 2,000 homes, they often have space. They have enough space to deliver biodiversity net gain, or at least a large proportion of it, within the, within the red line on site. Smaller-scale developers don't often have that space. And so an offsite solution is a real enabler for them. Having a habitat bank where they can balance their onsite with their offsite, and they can purchase even small fractions of units just to meet their planning requirements, is a solution that we're finding smaller-scale developers are finding is a real lifeline for them to navigate this new regime.

As an organization at Green Element Group, we do not talk about— well, we do talk about offsets, but in a way that we don't talk about offsets. Now you're talking about offsites, and there is— I'm not going to go into the details, but we already know the criticisms of offsets and they stand up scientifically. So the offsite solution that you're talking about, Mhm. I guess, would that happen anyway in those sites is, I guess, the main question that I have. And could you talk about any criticisms that you probably have heard around comparing it to offsets?

Ah, so I mean, this is an interesting and maybe slightly controversial view, sort of listening to you there, but biodiversity net gain is an offsetting regime. It is. because you're compensating for the loss of habitats on site. Now, I think what you're alluding to is the, the kind of spatial element and ensuring that what's being compensated for or offset is legitimately an offset in terms of it being like for like or better.

Yeah.

And that's where the— this sort of robust— the robust elements of the regime came— come in to ensure— to sort of manage risks around that. Now, the biodiversity metric itself, there, there are quite a lot of trading rules in there which manage that risk. So firstly, you can't trade down. So I couldn't destroy a really old, rich woodland and just put in hectares and hectares and hectares of football pitch to compensate for that. I have to compensate with either, either a like-for-like habitat type or something that's been recognized as more biodiversity value or more important or greater or better. So whilst I talk about biodiversity units in the round like it's a generic thing, actually there are loads of different types of biodiversity units. There's biodiversity units that are distinguished by their distinctiveness or importance And different types of habitats. So you'll have the lowland mixed deciduous woodland, for example, that rich, very mature habitat type is a high distinctiveness habitat or a very high distinctiveness habitat, and you can only replace it with itself, like for like. Whereas you might have an amenity grassland, which is a low or medium distinctiveness habitat type, where you could replace it with— A species-rich grassland. Which that would be okay, but you couldn't downgrade and you can't downgrade and trade off anything of lesser value. So that's what managed that means.

And you can only replace in the UK?

Yes. So that's the other element. It wouldn't be appropriate to lose a really rich oak woodland that you can only find in the UK to replace it with some kind of exotic tropical rainforest in Ecuador. That is not a legitimate offset.

Yeah.

So the biodiversity net gain regime is only valid in England, and actually the metric itself also incentivises local delivery. So whilst you can deliver your offsets, your biodiversity net gain requirements, anywhere in England, the further away you go from your development site, the more incentives are built into the metric to sort of penalise you for doing that, if you like.

Or leverage, or leverage, because it makes complete sense to me that if you take half an acre of prime woodland, or not even prime, but a reasonable biodiverse area in southern England, but you can go, well, actually we can do 50 acres of upland Wales or upland Lake District or somewhere, you know, wherever else.

Yeah.

That seems to me a reasonable trade, doesn't it? So there are some quite creative incentives that people are starting to use, isn't there?

Definitely, and I think that's where recognising that sometimes, you know, nature is extremely complex, biodiversity is extremely complex. It's not always appropriate to deliver biodiversity enhancements within a very busy, high disturbance environment like a housing development. And actually, you might get more bang for your buck, more biodiversity value, and greater durability and sustainability of that that biodiversity if it's done off-site at scale, as you say, in areas where it provides greater connectivity across the landscape, perhaps providing routes for mobile species to move within landscapes, builds resilience into landscapes. So there is this sort of balanced view of the off-site can actually sometimes deliver better outcomes for nature than doing it on-site.

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And tell me, because also I think one of the criticisms, I think, Will, and what you were talking about is when people offset carbon emissions specifically, that there is actually a lot of pretty loose control on what the long-term performance of that carbon-locking sort of mechanism might be. But you're saying that there's a 30-year control on the biodiversity of a site. So let's say you start a wetland site somewhere and you've said we're going to make 10 units. I'm making up numbers here.

Yeah, yeah.

What happens if you don't make 10 units?

Just to touch on the carbon point, because I— they get compared quite a lot, of course. But I'd say the fund— from my perspective, the fundamental challenges that we've seen in the carbon markets are around verification. So data transparency and verification. So poor openness around what's actually happened, what in terms of measurement, reporting, and verification. And then also around this sort of governance point where land that's been committed to carbon in the, you know, there isn't strong enough governance in place to ensure that that actually is going to be there in perpetuity or under the timeframes within which those commitments have been made, which has really undermined the market and why carbon offsetting is so heavily criticized. But the biodiversity net gain framework has been designed specifically to mitigate those risks. So 30 years is the time frame over which it's been committed, but actually the land is also bound through covenants or Section 106 agreements under the planning regime, which means that the land can only be used for that purpose for that 30-year period. And it's a statutory legal commitment that can be enforced, and there's a third party that can actually step in and ensure that those commitments are being delivered. There's also a requirement for quite pretty robust and regular monitoring, reporting, and verification. So for all of our habitat banks, for example, we have oversight, most of them through a responsible body, which is essentially a competent organisation that's a third party that has a legal oversight of what we're up to. And we have to undertake survey work and monitor the performance of the habitats that we're delivering on the ground. We have to send back reports to them on a regular basis. They can come and do spot checks, they can come and do their own surveys, and we have to demonstrate that we've done what we said we're going to do. And it's that governance that's really strong. It's a legal commitment, it's on the Land Registry. If the landowner dies or sells the land on to another landowner, that commitment still stays with the land and it's bound to the land for that period.

I can imagine one of the problems that you have is the offsetting companies that are more elusive in their communications and the way they do things muscling in on what you're doing and try and water it down because I feel like we're comparing apples and pears with this, even though, as you quite rightly say, it is offsetting. But you're— that's an apple, and what I was talking about was a pear.

Yeah.

And, you know, and I, I don't know, I'm just going through my mind and what's— because we know what these big companies, and they are big companies owned by Bezos, etc., they have a lot of money and a lot of power and influence.

Yeah.

And, um, I love the fact that it's almost, it's almost you can't do anything because it's set in legislation.

Yes.

It's almost, I wish we had learned what you've done now 30 years ago when offsetting was first announced.

Well, that's the point, is they have learned. This is offsetting 2.0, you know. This is another good take. And what kind of, what kind of business opportunities are you seeing coming out the back of this? Quite clearly, you're, you're part of a privately funded business that is basically making money out of creating biodiversity. So to be honest with you, whatever anything else is going on, that sounds like a pretty good story to me.

Yeah, I mean, I think that was another intention. Whatever you think of the previous government, I mean, this is a longstanding policy framework that's been developed over more than a decade. But the intention was to try and drive private sector capital into nature recovery and stop relying on taxpayers' money or indeed charities and philanthropy to conserve and restore nature across England. And, you know, there's been— there's a huge funding gap globally, £700 billion a year in the nature recovery funding gap. And in the UK, I think it's at least a good £6 million annually that can't be filled by taxpayers, it can't be filled by the charities and philanthropy, and, and private sector finance has to has to play a bigger role. And these regulations have created a market infrastructure. It's created an enabling environment for private investment. So we're backed by Gresham House and the British Sustainable Infrastructure Fund, which is essentially institutional investors, you know, local authority pension funds. And that wouldn't have happened. It's no coincidence that we secured that funding in 2021, which was when the Environment Act came in and created this regulatory framework. So it's quite It's transformational in that sense, and the opportunities for landowners, rural landowners, rural communities to also diversify their incomes, creating other sources of funding and incomes into the rural economy has been huge too. So you'll no doubt be aware of a whole range of changes and uncertainties for for landowners around inheritance tax and changes in subsidies and access to sustainable farming incentives. This is actually providing them a lifeline and another source of really solid revenue, sustainable revenue for them to not manage their farms for food production, but actually for nature.

Have you got any examples of good projects that have gone ahead that you've seen? And I was also wondering if you had any examples of non-property developers as well that have been a part of this.

Yeah, I mean, so about 40% of our biodiversity units go to housing, but the remainder actually go to all other sectors in the development world. So actually, we've— there's a great case study that we've worked closely with National Grid on, you know, their asset management and infrastructure work across the country. We've worked with water companies. We work with logistics and sort of commercial developers, so not housing at all, but if you can imagine those big box warehousing, there's not a lot of space there to deliver nature within the boundaries of the site, and maybe it's not the best place for it either. These logistics centres, so we've provided them with an off-site solution that's really delivering high-integrity biodiversity outside of the site. I mean, we work with pretty much every single type of developer that is there. We're providing solutions for them. And I think beyond the compliance world, which I'm not sure if that was also your question, was related to sort of beyond, above and beyond what's required from a compliance perspective, We're also now starting to work with organizations that are not offsetting, not trying to compensate for impacts in their operations, but actually they're trying to find a really robust, well-governed, transparent solution to invest in nature-positive projects that impact— have positive implications for their wider value chain. So outside of the development world, We're working with other organizations too that are doing it not because they have to, but because they want to.

So this is sort of ESG sort of stuff, is it? That, that, so I run a business and we decide that actually with our profits or with our ESG commitments, we want to be part of nature's recovery.

Yes, exactly. So there's growing momentum, the direction of travel kind of from a regulatory context is that organizations need to start disclosing their impacts on nature. So you'll be aware that this is— there's been a lot going on in this space from a carbon and climate perspective for some time now, and organizations are seeking a net-zero position on carbon. Well, that's— there's an extension of that to take account of organizations' risks related to nature, but also their dependencies upon nature as well. And then disclosing that formally as part of their annual reporting. So that's one sort of early driver. So you'll be aware of the voluntary framework called the— here's another acronym for you— TNFD. But Task Force—

I'm not aware of it at all, so you're going to have to—

Okay, I'll give you a real short snapshot. But so the Task Force for Nature-Related Financial Disclosures.

It rolls off the tongue, doesn't it? Yeah, just absolutely, yeah, really snappy.

Um, and that's an extension of the same framework for carbon, the TCFD, but that is a voluntary framework. Organizations don't have to follow it. It's, um, but it's widely being adopted in the UK and actually globally. Organizations that want to start understanding and measuring what their dependencies and risks are relating to nature, and then setting better targets for them to do better. And then indeed, at some point in the future, seek to deliver nature-positive outcomes as a result of that. There's also regulation coming out of Europe which is driving these behaviours as well.

If you want to, if you want to learn more about that, The Guardian— we worked with The Guardian on their TCFND. And I know that they have published that.

Yes.

So any listeners, it's quite a very well-thought-out report.

Yes.

So you can understand more in practice what it is.

So this is almost like pushing beyond legislation, you know, in the way that B Corp does. This is about businesses going, actually, we want to genuinely understand the widest impacts that we are having on the planet and people and climate. and do what we can about that. And do you think there is a potential that actually legislation will then sort of catch up on this at some point and it won't just be house builders and infrastructure people that are having to support this wonderful nature creation?

Absolutely. And that's really the pattern that we saw with the biodiversity net gain regulation. It was in the end, the real momentum and drive for it to be regulated came from business, from the developer sector. It was their green stamp. It was their kind of campaigning and pushing for a regulated framework. So there was a level playing field for all of them to be ensuring that they were delivering or responding to their impacts on nature in the same way as everyone else to create a fair workplace, if you like. And that we're seeing that play out now. I mean, Europe's ahead of us. They have legislation coming through that's requiring under CSRD Corporate Sustainability Reporting Directive.

You're doing so well.

You're doing really well.

You're doing so well on this one.

Can I just say, I love it. Right, Corporate Sustainability Reporting Directive, yes.

Which is the first really of its kind internationally, which is requiring large businesses, corporations to start to disclose what their impacts on the environment is, and specifically including nature-related impacts and dependencies. Now, there's been a bit of— there's been some hiccups along the way, and there's been— I think there's a delay to that being implemented now. But—

They've also reduced the size of the businesses as well.

Yeah, indeed. Yeah. But I think the precedent's being set there, you know, the direction of travel is that these requirements will become mandatory. The UK government's the biggest funder of the TNFD framework. You know, it is voluntary at the moment, but the general feeling is that that's the direction, is that there will be a mandatory requirement in time. So businesses want to get ahead of the game. They want to sort of be ready. They want to build business readiness and get their ducks in a row and start to think about how they're going to address these requirements.

And how would you recommend that businesses do start to think about this? Is this— if this is on the regulatory horizon, how should they start considering that?

I would say, first of all, they need some expertise. So they do need someone that knows something about nature, whether it's in-house or working with a consultant or indeed being part of an organisation, a membership organisation like there's the UK Biodiversity and Business Forum, which provide support and advice around how to get started. But I think the best way, there's a lot of tools out there, there's a lot of information under TNF FD. There's a lot of how-to guides, and I think it's just about getting stuck in, getting going on it. Every business— and this is where biodiversity's complexity can feel sort of quite overwhelming, where to start with it— every organization, actually, if you think about a drinks provider producing business compared to a tech company, compared to a taxi firm, they all have very, very different relationships and interactions with nature, and indeed will have different dependencies and risks related to nature. So I know it can definitely feel overwhelming, but I think getting stuck in and getting started on it is probably the best, the best thing that organizations can do, not be afraid of not doing it perfectly.

And have you, have you been to some of the nature reserves that you've effectively funded through you and your colleagues' work? I mean, have you had that moment, that sort of Hairs on the back of the neck moment walking through some of the things that you've helped create? And what are they like?

Yes, it's incredible. So we have 32 projects across the country right now covering more than 2,000 hectares of nature restoration actively happening on the ground. And it's, it's amazing. So, I mean, that was one element of working in consultancy in my previous life was that you never really— you didn't have that. You didn't have access to that, and you never really saw the good stuff happening. And now I can literally— I think my closest one is West Oxfordshire, near to where I live, and I can go out and see what's happening on the ground. We have trees being planted, ponds being dug. We've got this incredible project in North Yorkshire which we're taking on, and there'll be beavers introduced later in the year. We're already seeing the impact of what we're doing on the ground right now, not just for nature, but also for the communities within which our projects are up and running. So we work with local contractors. Had the best day a few weeks ago with one of our landowners, Alison, just walking around the project and seeing how it's made such a transformational impact on her family, that her multi-generational family that all live on the farm, and it's given them just as some secure income in these sort of uncertain times. So I love it. I love going out to see what we do on the ground. It's really meaningful, and you can actually see tangible benefits happening right now.

And just finishing, just finishing off for the final question, what key takeaways could you give for businesses listening?

From, in terms of developers, obviously you've got this brand new regime come in, and potentially is feeling like another burden, another thing to consider with all of these other planning requirements, um, which are so diverse now, and it might feel like it should be at the bottom of your list. But my takeaway for developers, or, or biggest tip, would be to just start thinking about biodiversity as early as possible. Get ecologists into your master planning and your feasibility teams and design teams as early as possible in the process so that you can design biodiversity into your schemes, minimise your need for delivering off-site, making it compatible with the wider master plan, and just managing risk around cost and delivery. Just get it— get in there as early as possible and don't leave it. I know historically ecologists used to be dragged in at the last minute to sort of tick a few boxes, but those days are long gone. And then in terms of businesses that perhaps outside of the compliance regime, there are so many benefits beyond just disclosure and accounting and reporting, which is a bit cynical, isn't it? I think there are actually a huge number of other benefits for starting to think about nature in your operations. So whether it's attracting talent and retaining talent, like young people really care about this stuff, and celebrating good performance in terms of nature impacts is, is a brilliant way to encourage people to join your business. But also your customer base. Can it give you a strategic advantage too? I think more and more people are becoming aware and want more from the companies that they buy their goods from. So why not take that as an opportunity rather than a constraint? And there's lots of benefits. You can get preferential lending for really good performance in terms of sustainability. I'm sure there's pressure from shareholders. To do better as well. So it's sort of thinking about not just about the burden and the constraint of thinking about nature, but also the huge opportunity that it could bring to your business as well.

So that was Emma, and I've been genuinely very excited about the potential of BNG for the last few years since I first heard about it. But Will, I don't know how aware of it you've been, and I suppose critically, how do you feel about it now having listened or sat through that or been part of That lovely conversation?

I think it's really exciting. I, I think it's much more critiqued than offsetting, and we cover that in the podcast. But I think for me, I get it now, and I get why it's so important. And what's nice for me is that TCFND and CSRD, and we deal with that at Green Element, and are dealing with it more and more as well. So I now can almost picture— the circle has been rounded for me, and I totally get it. And I think it's, I think it's brilliant.

So the TCFM, that's the, the Nature Disclosure piece, is— I mean, those are—

So we deal with the letters.

Those acronyms slightly blow my head off as a dyslexic. When it gets to 5-letter acronyms, I'm sort of like slightly on the floor, but Totally, totally. The nature disclosing piece, you're basically saying actually, which I totally get. I mean, it makes so much sense that a business starts to step back and go, well, what are we doing to the planet in every sense? I think is really interesting. And I thought your question around offsetting was very pertinent and rightly so, that there's been an awful lot of scurrilous behavior in that sector, hasn't there? And it's great to hear that the work being done around the biodiversity net gain sort of sector seems to have learned those lessons.

Yeah, yeah, I think so.

I mean, I think it's an easier problem to solve in that you take a field, you look at a field, you go back to a field in 5 years, 10 years, 50 years, 20 years, you can see roughly how much more biodiversity there is.

Yeah.

Carbon's a little more tricky, isn't it, always?

But they've kept it in the UK.

Yeah.

And I, that, that, I mean, it's kind of a bit of a—

Even in England actually they've kept it in.

Yeah.

And that's the other thing, 'cause you're in Scotland, you were saying what's going on in Scotland. The problem is there's a different regulation, there's a different sort of framework in Scotland and Wales compared to England.

Yeah, I picked up on that when she said England. I was like, actually, even if I'd have asked my house builders, then they would've gone, well, it doesn't matter to us.

There's different stuff going on in Scotland and it's very frustrating 'cause we're looking at a project on Arran where we're trying to do biodiversity net gain to look at a load of peatland restoration and it's a different system and it all seems a bit of a mess at the moment. No one quite knows what's going on. So, but I mean, for me, This is one of the good news stories.

Yeah.

This feels to me that civil servants, the system if you like, has listened and learned and asked really good questions and done some really good consultation and created the potential for a virtuous circle with private investment creating biodiversity and biodiversity that people can go to and see and experience. And to me, that's just Genius. And what I found very exciting about the conversation was that it's going to start stepping outside of just developers and builders, basically big infrastructure, small infrastructure. It's going to start going into, well, whatever it is I do has an impact on the planet and I can start to think about how I can do something about that. And I love that.

Yeah, yeah, I agree. I agree. And it's companies like us that should be taking note and doing more. with regards to our clients as well.

Yeah, yeah. I'm letting them know. I mean, I think that's the bottom line. And it was very interesting as well the way that Emma mentioned about staff retention and staff get— getting staff to join companies. And this is, you know, this is a big thing around sustainability, certainly in office buildings. You know, people really want sustainable office buildings because they're better to be in and they get better staff and they keep better staff. And that's what all of the kind of property agents are starting to say. And it's a similar Sort of that it's great to see that this is starting to impact in all the areas of an organization's activities. Given the backdrop of relenting— relentingly crap news, that made me smile. This has been a good day on the podcast.

So some of the takeaways that I got from that was that they— you need to get ecologists in earlier, and the sooner the better by the sounds of it. And it makes complete sense because If you are needing to do something around biodiversity net gain, then make sure that you're covered as soon as possible. And I thought it was interesting that Emma said that you are better off getting experts in as well. And I find it interesting largely because of the business that I run, but actually We need to make it almost so standard that you don't need to get experts in. This needs to be part and parcel with someone's job, and that's how we can really orchestrate change.

Well, it's interesting. And what I found very interesting as well is that, you know, when— I'm sure the same for you— when I was talking to people 15, 20 years ago, even 10 years ago, you'd start the thing going, your business is going to need to know all about its carbon emissions at some point in time in the future. The sooner you get onto this, the more ahead of the curve you'll be, the better you'll be doing, you know, better able to deal with it. And then this feels to me like the next sort of—

Yeah.

One of the next, the coming challenges or coming opportunities, I think critically, that businesses are gonna have. So they should be thinking about it. And again, it feels that business is leading and where business leads, politics tends to follow. Not always, certainly not what we're seeing in America, tends to follow. It is complicated. There's gonna be some show notes as well. I think we really put down some of those wonderful acronyms and some of those different systems and things in the show notes. So go and check out there.

Yeah.

But if you do one thing from having listened to this podcast, other than the usual things of rating the show and leaving the comment on Spotify and telling everyone about it and sharing with your network and getting in touch and telling us what you thought, If you do one other thing, it's start a conversation in your business or organization about what this could mean for you and what opportunities there are. That would make me happy. Would that make you smile, Will?

Yeah, it would. I would. And look at examples, like the Guardian one is a good example, to be fair. Have a read, see what they've done. Have a look at some good examples of what others have done. And I think Environment Bank have some good case studies on their website as well.

So thank you very much, Will. We'll catch up soon.

Thank you.