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      Natural Capital and Green Investment

      Both carbon sequestration and biodiversity enhancement are becoming increasingly necessary to both reduce emissions and offset environmental impacts generated by development in the UK.

      17 Jan 2022 2 MINUTE READ

      Natural Capital - Rural Outlook 24pp brochure 2021.jpg

      Carbon

      This past year has seen a huge amount of activity in the carbon arena driven by ever increasing pressure on governments and companies to commit to substantial emissions reductions. Carbon sequestration is increasingly seen as a key function of agricultural land to facilitate emissions reductions. However, while the carbon market is the most developed of any natural capital market, there is significant uncertainty surrounding the credibility of many carbon offsets and their ability create genuine environmental benefit. To help institutional and private clients identify income opportunities and provide direction on green investment, we conduct modelling and advise on carbon investment, as well as coordinating strategic reviews of existing land portfolios.

      Biodiversity

      The recent passing of the Environment Act 2021 into UK law, which stipulates that development in England must deliver at least a 10% net gain for biodiversity, is expected to result in an increasing demand for biodiversity offsetting.

      The development of one such innovative scheme in partnership with Cambridgeshire County Council is well underway. The scheme will see the phased conversion of c.140 ha of arable land into biodiverse habitats. By creating a range of different habitats at scale and structuring the scheme in a way that enables local developers to purchase biodiversity units ‘off-the-shelf’, we expect to capitalise on already growing demand and provide strong financial returns for the Council.

      There are opportunities to establish Biodiversity Net Gain (BNG) schemes across the Arc, which would result in:

      • Enhanced ecological connectivity by creating strategic links between priority habitats
      • Expansion of existing designated sites by forming habitat buffers
      • Improved ecosystem services through the adoption of environmentally sensitive land management practices over the long-term.

      This ensures cost-effective delivery of BNG that not only benefits nature, but also provides social benefits, such as community access to nature and improved amenity value, as well as contributing to improved air and water quality and carbon sequestration.

      This ensures cost-effective delivery of BNG that not only benefits nature, but also provides social benefits, such as community access to nature and improved amenity value, as well as contributing to improved air and water quality and carbon sequestration.

      It is essential to have a high level of expertise in this sector, combining an understanding of environmental objectives with an understanding of relevant contractual and financial structures. We currently advise the two Wildlife Trusts operating in the Arc (Beds, Cambs & Northants Wildlife Trust and Berks, Bucks & Oxon Wildlife Trust), as well as numerous institutional investors and developers, on the establishment of BNG schemes and the monetisation of environmental outcomes from land.

      The market for the provision of biodiversity units is expected to coalesce around dedicated conservation initiatives which are delivering habitat enhancements cost effectively, at scale, and in strategically important locations. The work we are doing in the area also evidences that very attractive financial returns can be derived from well-planned environmental initiatives.

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