1 00:00:16,680 --> 00:00:19,920 Hi, I'm Helen Avery with the Green Finance Institute and 2 00:00:19,920 --> 00:00:21,760 you're listening to Financing Nature. 3 00:00:22,640 --> 00:00:25,960 In this episode, I'm joined by Thomas Pickford at The Nature 4 00:00:25,960 --> 00:00:30,320 Conservancy and Glen Anderson of landscape project Wendling Back 5 00:00:30,480 --> 00:00:33,560 to talk about biodiversity, net gain in England and the 6 00:00:33,560 --> 00:00:37,360 implications for the EU. I think we all need to be saying 7 00:00:37,360 --> 00:00:40,080 that it's public funding plus private markets all the other 8 00:00:40,080 --> 00:00:41,760 way around. You know, they, they both need 9 00:00:41,760 --> 00:00:44,400 to be in the game and both need to be scaling up at the same 10 00:00:44,400 --> 00:00:47,040 time. And I think we're starting to 11 00:00:47,040 --> 00:00:50,040 see that heading in the right direction with the messaging 12 00:00:50,040 --> 00:00:54,120 that we're seeing from the EU framework and the IAPD. 13 00:00:54,640 --> 00:00:58,760 We see the nature markets. It should be a triple win 14 00:00:58,760 --> 00:01:00,920 basically. So, you know, you can grow a 15 00:01:00,920 --> 00:01:05,440 whole green economy off the back of compliance markets, which 16 00:01:05,440 --> 00:01:08,800 also enhance your underlying natural capital. 17 00:01:08,920 --> 00:01:13,520 So to kind of deregulate that process and destroy nature as, 18 00:01:13,520 --> 00:01:16,800 as, as part of development, you know, it's just ludicrous 19 00:01:16,800 --> 00:01:18,960 because you're, you're destroying your natural capital 20 00:01:18,960 --> 00:01:22,160 which sits on the the Treasury's balance sheet as opposed to 21 00:01:22,160 --> 00:01:23,840 enhance it. So you should have a kind of a 22 00:01:23,840 --> 00:01:27,280 triple fiscal win as part of these nature market framework. 23 00:01:34,160 --> 00:01:37,120 Hello, I hope you're enjoying the summer. 24 00:01:37,120 --> 00:01:40,520 If that is the season you are indeed in, it's something to be 25 00:01:40,520 --> 00:01:42,960 back. Today we have a bit of a bumper 26 00:01:42,960 --> 00:01:47,160 episode in that I'm going to be joined by two guests, Thomas 27 00:01:47,160 --> 00:01:50,240 Pickford, who is the Nature Conservancy's engagements and 28 00:01:50,240 --> 00:01:54,800 relationships lead in the UK and Glenn Anderson, who is a 29 00:01:54,800 --> 00:01:58,680 founding partner of a landscape scale project called Wendling 30 00:01:58,680 --> 00:02:02,880 Beck, which has been selling biodiversity net gain units. 31 00:02:03,240 --> 00:02:06,080 And the two have worked really closely together on biodiversity 32 00:02:06,080 --> 00:02:09,960 net gain since early days, sort of longer than five years. 33 00:02:10,199 --> 00:02:12,480 And that is really what we're going to be talking about today, 34 00:02:12,480 --> 00:02:16,520 England's biodiversity net gain market or BNG as we we love to 35 00:02:16,520 --> 00:02:19,080 call it and what is it, how does it work? 36 00:02:19,440 --> 00:02:22,280 And then Glenn's going to give us some real colour and depth of 37 00:02:22,280 --> 00:02:26,560 what it looks like for a farmer or land manager to be engaged in 38 00:02:26,560 --> 00:02:30,160 BNG and offering those units up. And Thomas is also going to 39 00:02:30,160 --> 00:02:35,160 share more with us about BNG in the so various movements 40 00:02:35,160 --> 00:02:39,360 happening in the EU lately, most notably the EU road map for 41 00:02:39,360 --> 00:02:41,520 nature markets that launched in July. 42 00:02:41,800 --> 00:02:54,560 So buckle up for our BNG ride. So hi, Thomas, thank you so much 43 00:02:54,560 --> 00:02:57,920 for joining us today. And well, firstly, how are you? 44 00:02:58,320 --> 00:03:00,480 I'm very well, Thank you. Yeah, all going well. 45 00:03:00,480 --> 00:03:02,200 How are you? Yeah, I'm well, thank you very 46 00:03:02,200 --> 00:03:05,800 much. And so I hope that TNC doesn't 47 00:03:05,800 --> 00:03:09,040 really need an introduction. So I think we're just going to 48 00:03:09,040 --> 00:03:12,240 dive straight in to biodiversity net gain in England. 49 00:03:12,600 --> 00:03:16,000 And I just wondered if you could start by sharing with those who 50 00:03:16,000 --> 00:03:20,840 aren't as familiar as us with BNG of what is it of? 51 00:03:21,000 --> 00:03:24,280 Course, yes, it is a a complicated concept, so it's 52 00:03:24,280 --> 00:03:27,760 good to get the basics right. So biodiversity net gain is a 53 00:03:27,760 --> 00:03:30,760 policy that applies in England, which requires that all new 54 00:03:30,760 --> 00:03:33,720 developments achieve a measurable increase of at least 55 00:03:33,720 --> 00:03:37,240 10% in biodiversity when compared to pre development 56 00:03:37,280 --> 00:03:40,080 site. It's a pioneering policy really 57 00:03:40,080 --> 00:03:43,280 it's, it's, it's first of its kind and it really has that 58 00:03:43,280 --> 00:03:46,360 potential to channel private finance towards nature right 59 00:03:46,360 --> 00:03:48,640 across England and integrate biodiversity into planning 60 00:03:48,640 --> 00:03:51,080 processes. The concept actually emerged in 61 00:03:51,080 --> 00:03:54,840 the 2021 Environment Act, although the regulations didn't 62 00:03:54,840 --> 00:03:57,840 come into force until February 2024, so last year. 63 00:03:58,400 --> 00:04:00,800 And it's, as I said, a mandatory requirement for all major 64 00:04:00,800 --> 00:04:02,840 developments to achieve 10% net gain. 65 00:04:02,840 --> 00:04:05,360 And it actually comes into force under the Town and Country 66 00:04:05,360 --> 00:04:08,160 Planning Act, which sounds like a technicality, but I think 67 00:04:08,160 --> 00:04:10,400 that's important for us to understand that first and 68 00:04:10,400 --> 00:04:12,640 foremost, this is a planning tool. 69 00:04:12,880 --> 00:04:16,160 It's a way for the planning system to contribute to our 70 00:04:16,279 --> 00:04:21,200 nature goals as a as a country. But what does net gain mean? 71 00:04:21,200 --> 00:04:24,120 I mean, for a lot of people, it doesn't mean much beyond the 72 00:04:24,120 --> 00:04:27,600 gym. So it it means that developers 73 00:04:27,680 --> 00:04:30,400 have to go beyond just compensating for the impacts of 74 00:04:30,400 --> 00:04:32,960 their development on biodiversity and actually 75 00:04:33,040 --> 00:04:36,600 achieve an increase as compared to the biodiversity on that site 76 00:04:36,600 --> 00:04:38,080 before the development was built. 77 00:04:38,720 --> 00:04:42,080 So listeners may or may not be familiar with the concept of the 78 00:04:42,080 --> 00:04:46,520 mitigation hierarchy. That's basically a system that 79 00:04:46,520 --> 00:04:50,760 says that developers must first avoid any negative impacts and 80 00:04:50,760 --> 00:04:53,280 then those that they can't avoid need to be minimised and 81 00:04:53,280 --> 00:04:56,360 mitigated. And then those that you can't 82 00:04:56,440 --> 00:04:59,280 minimise or mitigate, you then restore or rehabilitate. 83 00:04:59,480 --> 00:05:03,640 So basically compensate and then you only then use offsets to 84 00:05:03,640 --> 00:05:07,120 achieve no net loss. While the concept of net gain 85 00:05:07,120 --> 00:05:09,320 requires that developers do all of the above. 86 00:05:09,480 --> 00:05:12,520 So minimise, mitigate, compensate and then go even 87 00:05:12,520 --> 00:05:16,640 further and enhance biodiversity beyond what was already there. 88 00:05:17,560 --> 00:05:21,280 Now not all developers will be able to achieve 10% increase on 89 00:05:21,280 --> 00:05:23,280 the site, right? It might not just be possible 90 00:05:23,280 --> 00:05:25,320 space wise or what the development is going to be 91 00:05:25,320 --> 00:05:27,560 doing. And that's where the concept of 92 00:05:27,560 --> 00:05:30,440 biodiversity units or credits comes into play. 93 00:05:31,000 --> 00:05:34,840 If a developer can't achieve a 10% uplift on site, then they 94 00:05:34,840 --> 00:05:38,800 can buy biodiversity units off the market, essentially paying 95 00:05:38,800 --> 00:05:41,720 someone else who's restoring and protecting nature elsewhere. 96 00:05:42,080 --> 00:05:45,160 And this is usually done in the guise of buying units from what 97 00:05:45,160 --> 00:05:48,920 are called habitat banks, which is basically an area of land 98 00:05:48,920 --> 00:05:52,000 that's been set aside by a land manager for nature restoration 99 00:05:52,000 --> 00:05:54,800 for the long term. And then finally, if a developer 100 00:05:54,800 --> 00:05:59,280 can't find offsite biodiversity units which are appropriate or 101 00:05:59,280 --> 00:06:02,240 suitable for their needs, then they can buy what are called 102 00:06:02,240 --> 00:06:05,560 statutory credits, which are a last resort option. 103 00:06:05,560 --> 00:06:08,640 It's the most expensive option and that's essentially a 104 00:06:08,640 --> 00:06:11,120 government backed credit. So you're essentially paying the 105 00:06:11,120 --> 00:06:13,640 government to do nature restoration somewhere in 106 00:06:13,640 --> 00:06:17,680 England, a more strategic level. So essentially what this policy 107 00:06:17,680 --> 00:06:20,680 has done is create a government regulated compliance market for 108 00:06:20,680 --> 00:06:24,320 biodiversity credits in England, which is, as I said, pretty 109 00:06:24,320 --> 00:06:26,600 pioneering. And the reason why TNC has been 110 00:06:26,600 --> 00:06:29,920 so interested in it is because we believe it's only through 111 00:06:29,920 --> 00:06:32,120 such government regulated markets that you can actually 112 00:06:32,120 --> 00:06:35,600 achieve true integrity in biodiversity or nature markets 113 00:06:35,600 --> 00:06:37,160 and actually achieve scale as well. 114 00:06:38,560 --> 00:06:40,440 Thank you. That was an absolutely brilliant 115 00:06:40,440 --> 00:06:45,840 and concise explanation of BNG. So amazing and sort of coming 116 00:06:45,840 --> 00:06:47,120 down into the weeds a little bit. 117 00:06:47,120 --> 00:06:49,960 And I know we'll get even more into the weeds when Glenn joins 118 00:06:50,000 --> 00:06:52,920 us. So how does it work if you could 119 00:06:52,920 --> 00:06:54,520 explain that? I know there's a spatial 120 00:06:54,520 --> 00:06:57,400 element, a temporal element, and then of course there's the Defra 121 00:06:57,400 --> 00:06:58,920 metric. Yes. 122 00:06:58,920 --> 00:07:00,960 So maybe starts with the metric then. 123 00:07:01,160 --> 00:07:04,760 So Defra developed a standardised metric which uses 124 00:07:05,080 --> 00:07:07,640 habitat as a proxy for measuring biodiversity. 125 00:07:08,160 --> 00:07:10,560 And it allows developers to measure the level of 126 00:07:10,560 --> 00:07:14,000 biodiversity on a site before the development and then how 127 00:07:14,000 --> 00:07:16,760 much of the habitat that they will need to restore, either on 128 00:07:16,760 --> 00:07:19,880 site or offsite to achieve net gain after development has been 129 00:07:19,880 --> 00:07:23,000 has taken place. And developers can only actually 130 00:07:23,200 --> 00:07:25,640 achieve planning permission if they've conducted this 131 00:07:25,640 --> 00:07:29,640 calculation and come up with a net gain plan for biodiversity 132 00:07:29,640 --> 00:07:31,680 on their site. So that's where that planning 133 00:07:31,680 --> 00:07:34,640 element comes in. So the the metric assessors 134 00:07:34,640 --> 00:07:40,080 habitat type, distinctiveness, condition, size and strategic 135 00:07:40,080 --> 00:07:43,040 significance. So how it fits into the broader 136 00:07:43,080 --> 00:07:45,120 landscape or ecosystem essentially. 137 00:07:45,600 --> 00:07:48,960 And again, it does use habitat's proxy, which obviously has its 138 00:07:48,960 --> 00:07:51,840 limitations. There is a spatial multiplier 139 00:07:51,880 --> 00:07:54,400 built into the metric which intends to promote that 140 00:07:54,400 --> 00:07:56,400 mitigation hierarchy we were talking about. 141 00:07:56,400 --> 00:08:00,560 So it encourages on site 1st and then it encourages local 142 00:08:00,560 --> 00:08:04,880 compensation within the boundary of a local planning authority or 143 00:08:04,880 --> 00:08:08,000 what we call national character areas, which are basically just 144 00:08:08,000 --> 00:08:12,000 landscapes of the same type. And essentially if you buy an 145 00:08:12,000 --> 00:08:17,120 offsite unit from a habit bank beyond that specific that local 146 00:08:17,120 --> 00:08:19,320 area, you have to buy more units. 147 00:08:19,320 --> 00:08:20,800 So it's it's more expensive to do. 148 00:08:21,120 --> 00:08:24,120 So that's what the the kind of incentive is to be local. 149 00:08:24,560 --> 00:08:27,040 Right. And then any habitat improvement 150 00:08:27,480 --> 00:08:29,960 has been maintained for 30 years. 151 00:08:30,440 --> 00:08:33,000 So that requires the developers to have in place a plan for 152 00:08:33,000 --> 00:08:36,080 maintaining on site habitats for that period of time. 153 00:08:36,440 --> 00:08:38,360 So with their planning permission, they'll have to 154 00:08:38,360 --> 00:08:40,559 submit that plan for how it's going to be managed for 30 155 00:08:40,559 --> 00:08:44,880 years, quite a long time. And then any offset biodiversity 156 00:08:44,880 --> 00:08:48,480 units, they have to be secured and managed for 30 years and 157 00:08:48,480 --> 00:08:51,200 through legal agreements like conservation covenants or 158 00:08:51,200 --> 00:08:53,520 Section One O 6 agreements with local authorities. 159 00:08:54,240 --> 00:08:56,800 There's also the complexity of irreplaceable habitats. 160 00:08:56,800 --> 00:09:00,800 So that's things like ancient Woodlands and blanket bogs and 161 00:09:00,800 --> 00:09:04,280 basically BNG is not really applicable in those 162 00:09:04,280 --> 00:09:06,320 circumstances. Recognising that development 163 00:09:06,320 --> 00:09:08,240 shouldn't be impacting those areas at all. 164 00:09:08,480 --> 00:09:10,880 And you actually have to have a full compensation strategy 165 00:09:10,880 --> 00:09:14,600 required if you are impacting on irreplaceable habitats, which 166 00:09:14,600 --> 00:09:17,400 you shouldn't be anyway. And of course there's like 167 00:09:17,440 --> 00:09:19,880 there's a lot of limitations, which I'm sure you know, Glenn 168 00:09:19,880 --> 00:09:23,080 can also speak to later. But you know, habitats to proxy 169 00:09:23,480 --> 00:09:26,480 does mean that specific considerations for species left 170 00:09:26,480 --> 00:09:30,760 out or ecological functionality isn't really accounted for, but 171 00:09:30,760 --> 00:09:34,160 it does give us that common, consistent, standardised science 172 00:09:34,160 --> 00:09:37,720 based framework for nature credits, which is that basis for 173 00:09:37,720 --> 00:09:40,200 integrity. And it's a means of getting 174 00:09:40,200 --> 00:09:43,200 payments into farmers and any land managers, isn't it, to 175 00:09:43,200 --> 00:09:45,920 develop these habitat banks? Yeah, that's right. 176 00:09:45,920 --> 00:09:48,960 So we've seen farmers like Glenn who we'll hear from later, you 177 00:09:48,960 --> 00:09:51,840 know, putting aside their land and there was a lag time between 178 00:09:51,840 --> 00:09:55,520 the investment in the nature restoration and potentially the 179 00:09:55,680 --> 00:09:59,240 the income lost if it was productive land beforehand and 180 00:09:59,240 --> 00:10:01,520 the lifetime between that and then any biodiversity credits 181 00:10:01,520 --> 00:10:04,000 being produced. And So what we are starting to 182 00:10:04,000 --> 00:10:06,600 see is, you know, investment in those habitat banks. 183 00:10:06,600 --> 00:10:08,920 It's kind of a long term investment strategy which is 184 00:10:09,320 --> 00:10:12,920 which is really exciting to see. We have Vanessa Garcia on a 185 00:10:12,920 --> 00:10:16,600 couple of weeks ago who was talking through mitigation 186 00:10:16,600 --> 00:10:19,160 banking and sort of this biodiversity credit market 187 00:10:19,160 --> 00:10:21,640 that's under development in Colombia as well, which is not 188 00:10:21,640 --> 00:10:23,520 dissimilar. And also a net game was built in 189 00:10:23,520 --> 00:10:25,760 there. And you know, the reason we're 190 00:10:25,880 --> 00:10:28,160 again, we're talking about this today is very much in the 191 00:10:28,160 --> 00:10:32,760 context of B&G is, is this model that can potentially mobilise 192 00:10:32,760 --> 00:10:36,960 private investment into nature restoration, not just like this 193 00:10:36,960 --> 00:10:42,600 net net that we've seen before. But honestly, I know it's early 194 00:10:42,600 --> 00:10:45,440 days, but what sort of amounts are we looking at here that can 195 00:10:45,440 --> 00:10:48,720 be can be invested? It's a, it's a really good 196 00:10:48,720 --> 00:10:51,400 question and the figures are hard to come by partly because 197 00:10:51,400 --> 00:10:54,720 it's still such early days. You know, the policy has only 198 00:10:54,720 --> 00:10:58,480 been in effect for what 18 months and it's a complicated 1. 199 00:10:58,480 --> 00:11:01,040 So it does take time for the market to embed from for our 200 00:11:01,040 --> 00:11:02,840 market actors to get up and running. 201 00:11:03,400 --> 00:11:06,520 We've seen 3000 hectares of land go on the register in the 1st 16 202 00:11:06,520 --> 00:11:08,240 months, which isn't a bad start at all. 203 00:11:08,280 --> 00:11:09,560 You know that that's significant. 204 00:11:10,080 --> 00:11:12,400 But less than 2% of that has actually been sold. 205 00:11:12,720 --> 00:11:17,600 So it's actually very small amount which is suggests that 206 00:11:17,600 --> 00:11:20,200 that demand is low. But that kind of points towards 207 00:11:20,200 --> 00:11:23,800 some underlying factors which are kind of some of the reforms 208 00:11:23,800 --> 00:11:26,640 that some organisations are calling for with biodiversity 209 00:11:26,640 --> 00:11:29,400 net gains. So it does insinuate that most 210 00:11:29,400 --> 00:11:33,000 developers are choosing to achieve 10% BNG on site. 211 00:11:33,880 --> 00:11:35,280 There are various issues with that. 212 00:11:35,680 --> 00:11:37,800 I mean, one of the main criticisms is that they're not 213 00:11:37,800 --> 00:11:40,120 necessarily the highest integrity when developed on site 214 00:11:40,120 --> 00:11:42,800 and there isn't really a monitoring framework in place to 215 00:11:42,800 --> 00:11:46,600 keep track of whether they are actually achieved in that gain, 216 00:11:46,600 --> 00:11:48,200 especially over the whole 30 years. 217 00:11:48,480 --> 00:11:50,320 You know, local planning authorities often just don't 218 00:11:50,320 --> 00:11:53,120 have the capacity to be checking up on on these various different 219 00:11:53,120 --> 00:11:56,560 on site. And there has also been a report 220 00:11:56,600 --> 00:11:59,680 from F Tech which was commissioned by Wildlife Trusts, 221 00:11:59,680 --> 00:12:02,440 Wildlife and French Side Link and the Lifescape project which 222 00:12:02,440 --> 00:12:06,120 came out just this month actually, which found that 86% 223 00:12:06,120 --> 00:12:08,240 of all approved planning applications in the first year 224 00:12:08,240 --> 00:12:12,880 of BNG actually achieved exemptions from BNG, which is 225 00:12:12,880 --> 00:12:16,240 concerning. And you know, that is obviously 226 00:12:16,240 --> 00:12:19,520 limiting demand in terms of what's actually been achieved so 227 00:12:19,520 --> 00:12:21,880 far. So the best data available is I 228 00:12:21,880 --> 00:12:26,640 think what I can see from WCL Link which found that 680 229 00:12:26,640 --> 00:12:29,360 hectares of land has been secured for off site habitat 230 00:12:29,360 --> 00:12:32,920 creation enhancement and a further 95 hectares on site. 231 00:12:33,440 --> 00:12:38,280 So it's about 773 hectares overall, which is quite a 232 00:12:38,280 --> 00:12:42,080 shortfall on what Defra predicted would be generated 233 00:12:42,080 --> 00:12:45,160 annually, which is about 5000 hectares annually. 234 00:12:45,240 --> 00:12:51,120 So demand just isn't quite there yet, but we are starting to see 235 00:12:51,120 --> 00:12:54,240 that tick up gradually and I'm sure you'll hear from Glenn 236 00:12:54,240 --> 00:12:55,840 shortly. You know he's had a lot of 237 00:12:55,840 --> 00:12:58,480 demand for his credits for starters. 238 00:12:58,960 --> 00:13:02,120 We're also going to see and it's been proposed recently by 239 00:13:02,120 --> 00:13:04,920 government the integration nationally significant 240 00:13:04,920 --> 00:13:08,880 infrastructure projects into BNG regulations as of May next year 241 00:13:08,880 --> 00:13:13,120 2026, which could unlock a lot of more demand for biodiversity 242 00:13:13,120 --> 00:13:15,640 units. So watch this space there. 243 00:13:16,320 --> 00:13:17,960 At the same time as that proposal there, we're also 244 00:13:17,960 --> 00:13:22,240 seeing proposals to remove small sites from biodiversity net gain 245 00:13:23,000 --> 00:13:27,080 and we what we think is about 70% of developments purchasing 246 00:13:27,080 --> 00:13:30,680 off site units at the moment are those small developments. 247 00:13:30,680 --> 00:13:34,840 So less than 10 houses, which is about 38% of the demand so far. 248 00:13:34,840 --> 00:13:38,600 So that would undermine demand even further if we saw those 249 00:13:38,600 --> 00:13:41,840 proposals goes forward. So there's quite a lot isn't 250 00:13:41,840 --> 00:13:45,560 there to you sort out in these early years while it's being 251 00:13:45,560 --> 00:13:49,120 embedded as you would expect in any kind of new policy. 252 00:13:49,640 --> 00:13:51,800 Because I remember initially some of the numbers we saw were 253 00:13:51,800 --> 00:13:56,720 like 200 million unlocked annually into nature restoration 254 00:13:56,720 --> 00:13:59,160 because the assumption was a lot of it was going to be going into 255 00:13:59,160 --> 00:14:01,880 habitat banks. And I know that hasn't been 256 00:14:01,880 --> 00:14:04,480 quite the case and there's a few leading issues with it. 257 00:14:04,480 --> 00:14:06,440 Well, this is that's super helpful. 258 00:14:06,440 --> 00:14:09,080 And thanks for this sort of discussion on BNG. 259 00:14:09,240 --> 00:14:12,000 It's really helpful. But, and I know we'll get into 260 00:14:12,000 --> 00:14:14,200 say more bit more technical detail on some of the challenges 261 00:14:14,200 --> 00:14:17,000 when Glenn comes on in a bit, but I didn't want to waste this 262 00:14:17,000 --> 00:14:21,640 opportunity while you're here, given how much TNC and the work 263 00:14:21,640 --> 00:14:23,560 you've been doing. Thomas has been looking at 264 00:14:23,560 --> 00:14:31,720 Europe so far beyond little old England and how you could have 265 00:14:31,720 --> 00:14:33,920 approaches there that would unlock private sector 266 00:14:33,920 --> 00:14:38,120 investment, particularly through perhaps biodiversity credits or 267 00:14:38,120 --> 00:14:39,840 mitigation banking, those kinds of things. 268 00:14:40,120 --> 00:14:42,560 So would you be able to sort of share with us kind of what is 269 00:14:42,560 --> 00:14:46,240 the state of play across Europe at the moment in terms of do you 270 00:14:46,240 --> 00:14:49,520 see a role for BNG, Is there already mitigation banking if 271 00:14:49,520 --> 00:14:53,360 not with a net gain happening? Yeah, of course, it's a really 272 00:14:53,360 --> 00:14:54,800 exciting field in Europe at the moment. 273 00:14:54,800 --> 00:14:57,800 There's a lot going on. There isn't a huge history of 274 00:14:57,800 --> 00:15:01,480 mitigation banking in Europe. We don't see it formally, you 275 00:15:01,480 --> 00:15:03,680 know, integrated any government schemes. 276 00:15:03,680 --> 00:15:06,440 Currently we are seeing some nascent voluntary biodiversity 277 00:15:06,440 --> 00:15:10,040 credit initiatives being piloted in places like France, Ireland 278 00:15:10,040 --> 00:15:12,840 and, and Italy. And and because of that, but 279 00:15:12,840 --> 00:15:16,040 also because of the kind of the the extensive policy framework 280 00:15:16,040 --> 00:15:18,160 that already exists at the EU level. 281 00:15:18,160 --> 00:15:22,320 So the nature restoration regulations, the CSRD and all 282 00:15:22,320 --> 00:15:24,080 the rest. Because of that, we actually saw 283 00:15:24,080 --> 00:15:26,760 that there was a real opportunity to think about how 284 00:15:26,760 --> 00:15:30,160 nature credits could be a tool in a toolbox to be stimulating 285 00:15:30,160 --> 00:15:32,960 the finance needed for Europe to meet its nature goals. 286 00:15:32,960 --> 00:15:35,960 And you know, we all need Europe to be meeting its nature goals, 287 00:15:36,320 --> 00:15:39,920 even how large it is. And also, you know, many other 288 00:15:39,920 --> 00:15:42,400 regions look towards Europe as a leader. 289 00:15:42,800 --> 00:15:46,240 And so earlier this year The Nature Conservancy published a 290 00:15:46,240 --> 00:15:50,560 report which sets out the case for an EU wide common framework 291 00:15:50,560 --> 00:15:54,600 to enable the development of credible, effective, regulated 292 00:15:54,680 --> 00:15:57,560 nature markets. You know, this is all as I was 293 00:15:57,560 --> 00:16:00,920 saying, it's the context of that gaping biodiversity funding gap 294 00:16:00,920 --> 00:16:04,720 for nature in in Europe, but also the the many different 295 00:16:04,720 --> 00:16:07,640 frameworks and regulations that already exist which need 296 00:16:07,640 --> 00:16:10,520 mechanisms to fund them like nature restoration regulation. 297 00:16:11,280 --> 00:16:16,880 So what we set out in that paper is various use cases for 298 00:16:16,880 --> 00:16:20,960 credits, both voluntary and compliance, but really centering 299 00:16:20,960 --> 00:16:23,240 the essential role of the European Commission in setting a 300 00:16:23,240 --> 00:16:27,640 common science based framework of principles, you know, 301 00:16:27,680 --> 00:16:31,280 protocols for certification, verification, enforcement, 302 00:16:31,280 --> 00:16:34,440 monitoring, governance. What we're trying to make the 303 00:16:34,440 --> 00:16:37,520 case for is that that's the role of the European Commission to 304 00:16:37,520 --> 00:16:41,120 set out that framework, which the member states can then pull 305 00:16:41,120 --> 00:16:43,840 from to develop their own national schemes in the 306 00:16:43,840 --> 00:16:47,520 confidence and trust that the the scientific rigour exists 307 00:16:47,520 --> 00:16:51,640 behind that framework already. And make sure that we don't see 308 00:16:51,640 --> 00:16:54,960 this fragmentation of many different schemes across the 309 00:16:54,960 --> 00:16:58,760 different nation member states. Which would, you know, possibly 310 00:16:58,760 --> 00:17:01,960 disincentivize private sector investment in these nascent 311 00:17:01,960 --> 00:17:04,760 markets, but also would undermine attempts for, you 312 00:17:04,760 --> 00:17:08,280 know, trans boundary where appropriate trans boundary 313 00:17:08,800 --> 00:17:11,119 landscapes acknowledging that nature doesn't end at the 314 00:17:11,119 --> 00:17:14,960 border. So, you know, we're quite clear 315 00:17:15,040 --> 00:17:18,680 that we don't see any nature market that is not government 316 00:17:18,680 --> 00:17:22,160 regulated by the voluntary or compliance reaching scale 317 00:17:22,160 --> 00:17:25,560 integrity needed. But what we do see is that real 318 00:17:25,560 --> 00:17:28,079 potential for the European Commission to take a step 319 00:17:28,079 --> 00:17:31,040 forwards. You know, excitingly, just this 320 00:17:31,040 --> 00:17:33,880 month we have seen that with the the publication of the the Road 321 00:17:33,880 --> 00:17:37,680 Map towards Nature credits. Yes, and I'm sure your paper was 322 00:17:37,680 --> 00:17:40,600 hugely influential in that road map development. 323 00:17:40,600 --> 00:17:43,640 So on that, could you just walk us through what that road map 324 00:17:43,640 --> 00:17:46,120 lays out? So it's important to say that, 325 00:17:46,240 --> 00:17:48,520 as we were talking about earlier, the EU road map is a 326 00:17:48,520 --> 00:17:51,080 voluntary scheme. So it's government regulated but 327 00:17:51,080 --> 00:17:54,160 voluntary, and the suggestion is to create what are called 328 00:17:54,160 --> 00:17:58,040 certificates, which recognise nature positive actions beyond 329 00:17:58,360 --> 00:18:02,680 individual legal obligations and mandatory mitigation hierarchy. 330 00:18:03,480 --> 00:18:06,320 So it's actions that go beyond what we already have to be doing 331 00:18:06,320 --> 00:18:09,880 in the EU for instance. So a nature credit in this case 332 00:18:09,880 --> 00:18:13,000 would be considered as a unit that represents a nature 333 00:18:13,000 --> 00:18:17,440 positive outcome derived from a certified independently verified 334 00:18:17,480 --> 00:18:20,800 action, which is quantified using a recognised metric or 335 00:18:20,800 --> 00:18:22,840 indicator. And that's what we're hoping 336 00:18:22,840 --> 00:18:26,120 would be designated by this EU wide framework. 337 00:18:26,960 --> 00:18:29,400 And So what it's actually proposing is a 2 step model of 338 00:18:29,400 --> 00:18:31,560 certification going into crediting. 339 00:18:31,880 --> 00:18:35,320 So essentially I would propose A conservation or restoration 340 00:18:35,320 --> 00:18:39,560 plan, which I would then take to a third party independent 341 00:18:39,560 --> 00:18:43,400 verifier who would then verify it based on the criteria which 342 00:18:43,400 --> 00:18:46,560 is set out in the EU framework. So that there is that that 343 00:18:46,560 --> 00:18:50,560 credibility and confidence that what I'm doing is high integrity 344 00:18:50,920 --> 00:18:53,360 for both people and nature, importantly. 345 00:18:53,880 --> 00:18:56,080 And then based on that verification, I will be given a 346 00:18:56,080 --> 00:18:58,840 certificate. I can use that certificate to 347 00:18:58,920 --> 00:19:02,840 help attract, you know, upfront investment, but it also gives 348 00:19:03,040 --> 00:19:05,640 other stakeholders that trust that what I'm doing is, as I was 349 00:19:05,640 --> 00:19:08,960 saying, high integrity and then credits will be progressively 350 00:19:09,440 --> 00:19:13,280 issued as the results from that plan are achieved. 351 00:19:13,880 --> 00:19:16,960 So the the road map then sets out how we're going to get to 352 00:19:16,960 --> 00:19:19,720 that endpoint, which is essentially the creation of an 353 00:19:19,720 --> 00:19:23,120 expert body, which is going to develop those high integrity and 354 00:19:23,120 --> 00:19:26,000 transparent methodologies. And they say they want to focus 355 00:19:26,000 --> 00:19:29,720 on simplicity and usability, but also governance and safeguards. 356 00:19:30,200 --> 00:19:32,840 And, and they also want to try to do some work around 357 00:19:32,840 --> 00:19:35,800 identifying what the key drivers of supply and demand will be 358 00:19:35,800 --> 00:19:38,640 within the EU. And they also, you know, quite 359 00:19:38,640 --> 00:19:42,040 importantly, recognise the need for public seed funding to kick 360 00:19:42,040 --> 00:19:45,040 start the market. And so that's things like de 361 00:19:45,040 --> 00:19:48,640 risking finance, maybe blended finance vehicles and technical 362 00:19:48,640 --> 00:19:52,480 assistance so that we can help plug the gap between the upfront 363 00:19:52,480 --> 00:19:56,200 investment and the sale of the credits later on, which we know 364 00:19:56,200 --> 00:19:59,080 has been, you know, one of the the challenges in BNG, for 365 00:19:59,080 --> 00:20:00,840 instance, in trying to get the market off the ground. 366 00:20:01,480 --> 00:20:05,240 So overall, we're moving towards development of this credible, 367 00:20:05,240 --> 00:20:08,080 consistent framework. And we look forward to kind of 368 00:20:08,080 --> 00:20:12,560 contributing to that process. So just to clarify, Thomas, BNG 369 00:20:12,560 --> 00:20:14,800 is obviously a regulated compliance market. 370 00:20:15,000 --> 00:20:18,640 What the EU road map seems to lay out is a framework for the 371 00:20:18,640 --> 00:20:21,360 development of a voluntary market. 372 00:20:21,360 --> 00:20:24,840 However, is that how you see it? Yes, that's right. 373 00:20:24,840 --> 00:20:28,360 So BNG is a regulated compliance market in the sense that you 374 00:20:28,360 --> 00:20:31,240 have to achieve 10% uplift. If you can't do that on site, 375 00:20:31,240 --> 00:20:32,720 you'll have to buy a credit, right? 376 00:20:33,040 --> 00:20:36,400 Whereas what the EU road map is suggesting is a regulated 377 00:20:36,520 --> 00:20:39,360 voluntary market. There doesn't seem to be a 378 00:20:39,360 --> 00:20:42,680 compliance mechanism in there yet, but that's not to say that 379 00:20:42,680 --> 00:20:45,560 it might not be developed or that member states might not 380 00:20:45,560 --> 00:20:48,520 choose to use that EU wide framework and then create 381 00:20:48,520 --> 00:20:51,440 compliance mechanisms for their own country. 382 00:20:51,800 --> 00:20:54,560 So it remains to be seen how it will actually pan out and. 383 00:20:55,280 --> 00:20:58,200 When we say regulated voluntary market, we mean sort of 384 00:20:58,200 --> 00:21:01,960 regulated at the level of what the methodologies need to be in 385 00:21:01,960 --> 00:21:04,600 the standards, right? That's brilliant. 386 00:21:06,080 --> 00:21:09,960 So Glenn's going to come on imminently and just before he 387 00:21:09,960 --> 00:21:13,200 does, just so listeners understand the connection 388 00:21:13,200 --> 00:21:15,440 between you and Glenn and why you're both here together, Could 389 00:21:15,440 --> 00:21:17,880 you just briefly tell us how you've been working with 390 00:21:17,880 --> 00:21:20,400 Wendling Beck? Yeah, of course. 391 00:21:20,400 --> 00:21:23,480 So the partnership with Wendling Beck began before my time at 392 00:21:23,480 --> 00:21:25,680 TNCI. Think it's at least 5 or 6 years 393 00:21:25,680 --> 00:21:28,000 actually. Well, TNC actually published a 394 00:21:28,000 --> 00:21:31,200 paper on best practise for biodiversity net game even 395 00:21:31,200 --> 00:21:34,240 before the regulations came out, setting out what we thought a 396 00:21:34,240 --> 00:21:37,560 good scheme would look like. And then we were connected with 397 00:21:37,560 --> 00:21:41,760 Glenn who was really interested in what the modelling and the 398 00:21:41,760 --> 00:21:44,680 business case for this might be. And we, we struck up the 399 00:21:44,680 --> 00:21:48,000 partnership and Glenn and the other land owners within the 400 00:21:48,000 --> 00:21:49,640 Gwendolyn Bet scheme are fantastic. 401 00:21:49,640 --> 00:21:51,920 They're, you know, really pioneering and it's really 402 00:21:51,920 --> 00:21:53,560 exciting to see what's going on there. 403 00:21:53,560 --> 00:21:57,400 I visited twice and I come away optimistic each time that these 404 00:21:57,400 --> 00:22:01,440 schemes can work and can help us to transition towards nature 405 00:22:01,440 --> 00:22:04,480 restoration. So TNC has just been supporting 406 00:22:04,480 --> 00:22:06,760 with some of the modelling work, the business case. 407 00:22:07,040 --> 00:22:10,000 And at this point now we're also trying to kind of amplify the 408 00:22:10,000 --> 00:22:13,320 messaging that's coming out of the work at Wendling Beck, both 409 00:22:13,400 --> 00:22:16,560 here in England, but also within the European Commission. 410 00:22:16,560 --> 00:22:19,080 So Wendling Beck's one of the case studies that we often take 411 00:22:19,400 --> 00:22:22,080 to our European stakeholders to make the case for each market. 412 00:22:22,600 --> 00:22:23,920 Brilliant. Let's get him on. 413 00:22:31,560 --> 00:22:33,600 Well, Glenn, thank you so much for joining us today. 414 00:22:34,120 --> 00:22:36,320 It's lovely to have you here. Thanks Helen. 415 00:22:36,320 --> 00:22:39,200 Thanks for having me on. And we've just been talking to 416 00:22:39,200 --> 00:22:42,040 Thomas, who's sort of given us sort of the the bigger sort of 417 00:22:42,040 --> 00:22:45,960 overview of where BNG sort of fits in, in terms of sort of 418 00:22:45,960 --> 00:22:49,440 delivering for nature, especially within the context of 419 00:22:49,440 --> 00:22:52,240 Europe. But I wondered if you're going 420 00:22:52,240 --> 00:22:56,240 to sort of give us the on the ground experience, if you could 421 00:22:56,240 --> 00:23:00,120 just actually start by sharing with us what is Wendling Beck? 422 00:23:00,760 --> 00:23:05,840 So we are a a landscape scale land use change project. 423 00:23:05,880 --> 00:23:09,320 So the project is now just over 5 years old. 424 00:23:09,840 --> 00:23:12,680 We were kind of slightly ahead of the game in terms of looking 425 00:23:12,720 --> 00:23:15,720 at biodiversity net gain. It was, it wasn't a policy when 426 00:23:15,720 --> 00:23:20,480 we started and we've kind of collaborated with a number of of 427 00:23:20,560 --> 00:23:24,520 land owners, neighbours to create something bigger and 428 00:23:24,520 --> 00:23:26,120 better than the sum of the parts. 429 00:23:26,520 --> 00:23:30,200 We needed a bit of aggregation to be able to deliver the, the 430 00:23:30,200 --> 00:23:32,800 type of project that we wanted to and at the scale that we 431 00:23:32,800 --> 00:23:36,240 wanted to. Yeah, it's been a learning 432 00:23:36,240 --> 00:23:39,880 curve, but we've, we've got there and we're now market 433 00:23:39,880 --> 00:23:41,760 ready. We're we're sort of trading if 434 00:23:41,760 --> 00:23:43,840 you like, and that's going quite well. 435 00:23:44,600 --> 00:23:46,720 Yeah, it's a, it's a couple of 1000 acres. 436 00:23:46,720 --> 00:23:50,080 So we're, we're, you know, broadly we've got sort of four 437 00:23:50,080 --> 00:23:52,160 farms that are about 500 acres each. 438 00:23:52,160 --> 00:23:55,080 So no huge land owners or anything like that. 439 00:23:55,600 --> 00:23:59,840 And we're all on quite marginal land, very thin sandy soils. 440 00:24:00,200 --> 00:24:01,800 We had to do something different. 441 00:24:02,480 --> 00:24:06,520 We, we, our businesses were not resilient in the form that they 442 00:24:06,520 --> 00:24:09,160 were from a farming perspective. We weren't big enough. 443 00:24:09,160 --> 00:24:11,960 The soil types were not resilient enough. 444 00:24:11,960 --> 00:24:15,040 We were particularly exposed to drought and we're going through 445 00:24:15,040 --> 00:24:17,680 a a fairly monumental drought at the moment. 446 00:24:17,720 --> 00:24:20,440 And, and everybody keeps saying to the each other that we're 447 00:24:20,440 --> 00:24:21,840 glad we haven't got any crops in the ground. 448 00:24:21,840 --> 00:24:24,160 It's quite hard actually delivering habitat in these 449 00:24:24,160 --> 00:24:27,880 conditions, but they're a lot more forgiving than than trying 450 00:24:27,880 --> 00:24:31,040 to grow barley or wheat or or something like that on on this 451 00:24:31,040 --> 00:24:34,680 type of land. So yeah, it's been a lot of 452 00:24:34,680 --> 00:24:36,600 work, but we're pleased that we did it. 453 00:24:37,320 --> 00:24:39,040 Oh gosh, it has been a lot of work. 454 00:24:39,040 --> 00:24:41,560 And so I wonder if you can sort of tell us, did you say you 455 00:24:41,560 --> 00:24:45,640 started about 4-5 years ago, was it now and was that sort of in 456 00:24:45,640 --> 00:24:47,480 the pilot testing phase for government? 457 00:24:47,480 --> 00:24:48,840 What was? What did that look like? 458 00:24:49,080 --> 00:24:51,680 We did a number of things. We're actually one of the round 459 00:24:51,680 --> 00:24:54,040 one nerf projects. So the nerf is the Natural 460 00:24:54,040 --> 00:24:58,480 Environment Investment Readiness Fund, which is GFI quite closely 461 00:24:58,480 --> 00:25:02,200 aligned to. We managed to secure some 462 00:25:02,200 --> 00:25:05,960 funding as as part of that, that round one, which was trying to 463 00:25:06,200 --> 00:25:10,080 put Seed Rattle into projects to help with feasibility and get 464 00:25:10,080 --> 00:25:12,960 them off the ground. So that really gave us a leg up 465 00:25:12,960 --> 00:25:17,160 and helped us to start thinking about how it would all work and 466 00:25:17,160 --> 00:25:18,680 the feasibility and what have you. 467 00:25:19,800 --> 00:25:25,960 And then we were also became a Defra BNG pilot, which was again 468 00:25:26,120 --> 00:25:30,960 hugely helpful to us. It enabled us to do some of the 469 00:25:30,960 --> 00:25:35,120 baselining and create some of the early habitats off the off 470 00:25:35,120 --> 00:25:37,560 the back of that through, you know, kind of early 471 00:25:37,560 --> 00:25:39,040 interventions and that sort of thing. 472 00:25:39,040 --> 00:25:43,040 So, you know, it's, it's been really quite a positive 473 00:25:43,040 --> 00:25:47,440 experience I would say overall. But I think it shows the point 474 00:25:47,440 --> 00:25:50,320 that this isn't something you can just go out and do. 475 00:25:50,320 --> 00:25:54,720 There is quite a lot of upfront funding, grant funding that 476 00:25:54,720 --> 00:25:57,480 needs to be put in to help land managers and farmers. 477 00:25:57,760 --> 00:26:02,120 Huge, huge amount, way beyond what we ever anticipated to be 478 00:26:02,120 --> 00:26:04,120 honest. So the, the nerf funding was 479 00:26:04,120 --> 00:26:07,720 100,000 lbs and at the time we thought that was, you know, a 480 00:26:07,720 --> 00:26:10,600 huge amount of money that would do everything that we needed to 481 00:26:10,600 --> 00:26:12,640 do. And I think at the moment we're 482 00:26:12,640 --> 00:26:15,520 up at about two or two and a half, £1,000,000 worth of 483 00:26:15,520 --> 00:26:18,720 investment. So it's and obviously that 484 00:26:18,720 --> 00:26:22,280 figure now includes lots of habitat creation and capital 485 00:26:22,280 --> 00:26:25,440 works that have happened since. So gosh, that's a huge upfront 486 00:26:25,440 --> 00:26:28,560 investment. So sort of talk to us about, I 487 00:26:28,560 --> 00:26:30,560 mean, obviously you don't have to tell us how much money you're 488 00:26:30,560 --> 00:26:34,360 making out BNG, but sort of tell us how the economic stack up 489 00:26:34,360 --> 00:26:36,600 with the compliance model like BNG. 490 00:26:37,120 --> 00:26:41,240 You know, we've got about 3000 BNG units that we will deliver. 491 00:26:41,800 --> 00:26:44,480 You never have a completely accurate figure because there's 492 00:26:44,480 --> 00:26:47,720 these temporal multipliers within the BNG metric that mean 493 00:26:47,720 --> 00:26:51,560 that depending on when you sell. So if you create habitat in 494 00:26:51,560 --> 00:26:55,400 advance, the metric deems that there's less risk of failure and 495 00:26:55,400 --> 00:26:59,120 it rewards you by giving you more units if you sell at a 496 00:26:59,120 --> 00:27:01,000 later date. But obviously you don't know 497 00:27:01,000 --> 00:27:03,240 when you're going to sell, so it's quite difficult to nail 498 00:27:03,240 --> 00:27:05,520 down exactly how many units you're going to deliver. 499 00:27:05,520 --> 00:27:09,280 Will be somewhere around 3000. When we first started the 500 00:27:09,280 --> 00:27:13,840 project, the early F Tech analysis had had BNG units of a 501 00:27:13,840 --> 00:27:16,680 kind of an average value of about £11,000 a unit. 502 00:27:17,480 --> 00:27:20,280 By the time we got close to being market ready, they were at 503 00:27:20,280 --> 00:27:23,560 about 35,000 a unit. So you can, you can do the maths 504 00:27:23,560 --> 00:27:25,040 on that. It's a, it's a big chunk of 505 00:27:25,040 --> 00:27:29,240 money, but it is for 30 years and it does include all of your 506 00:27:29,240 --> 00:27:31,760 capital works and it also includes inflation and the 507 00:27:31,760 --> 00:27:33,920 inflationary effect is huge on this. 508 00:27:33,920 --> 00:27:38,520 So from a commercial point of view, we have a high kind of 125 509 00:27:38,520 --> 00:27:40,800 year business model I think that sits behind this. 510 00:27:40,800 --> 00:27:45,040 This is multi generational successional planning and 511 00:27:45,840 --> 00:27:48,480 although those those numbers are quite big actually if you take 512 00:27:48,480 --> 00:27:51,160 the the revenue that's coming off the the previous farm 513 00:27:51,160 --> 00:27:54,480 systems over 30 year and apply inflation and what have you, you 514 00:27:54,480 --> 00:27:56,280 actually get to a similar kind of number. 515 00:27:56,880 --> 00:27:59,080 So it does need to be around those figures. 516 00:27:59,080 --> 00:28:02,360 What we have seen as we're getting to market now and the 517 00:28:02,400 --> 00:28:05,920 and supply and demand are becoming a bit more equalised is 518 00:28:05,920 --> 00:28:08,440 that actually that price is dropping quite quickly as well. 519 00:28:08,440 --> 00:28:11,640 So I think at the moment with the average price, we've gone 520 00:28:11,640 --> 00:28:15,320 from sort of 35,000 a unit down to about 25,000 a unit on 521 00:28:15,320 --> 00:28:17,880 average. But there's quite big variations 522 00:28:17,880 --> 00:28:21,400 between habitat types as well. So you might have a very 523 00:28:21,400 --> 00:28:25,000 difficult to create habitat such as a watercross unit. 524 00:28:25,000 --> 00:28:26,720 That's probably quite a lot of capital works. 525 00:28:26,720 --> 00:28:29,840 They might be up sort of a hundred, £150,000 a unit. 526 00:28:30,360 --> 00:28:33,320 You then might have a simple grassland, neutral grassland or 527 00:28:33,320 --> 00:28:36,320 something like that, that you could be down sub 20,000 sort of 528 00:28:36,320 --> 00:28:38,480 between sort of 18 and 20,000 a unit. 529 00:28:38,480 --> 00:28:42,000 So there's, you know, the market is becoming more sophisticated 530 00:28:42,000 --> 00:28:45,960 as it evolves and people are starting to understand what's 531 00:28:45,960 --> 00:28:48,960 required in actually delivering these different habitat types. 532 00:28:49,320 --> 00:28:51,440 You know, and, and we might not sell all the units, we don't 533 00:28:51,440 --> 00:28:54,160 know exactly how supply and demand is going to work. 534 00:28:54,160 --> 00:28:57,200 So the the business model is actually predicated on that, not 535 00:28:57,200 --> 00:29:01,840 selling all of the units that as long as we sell, you know, a 536 00:29:01,880 --> 00:29:06,480 proportion or a decent proportion 50 to 70%, then we 537 00:29:06,480 --> 00:29:09,400 should be OK. There are a number of variables 538 00:29:09,400 --> 00:29:12,280 in there that we just not going to know until we get to that 539 00:29:12,280 --> 00:29:15,120 point in time and that's part of the risk of doing it. 540 00:29:15,600 --> 00:29:20,280 But we feel that the economics stack up better than the 541 00:29:20,280 --> 00:29:24,120 opportunity cost of farming this land, particularly when you 542 00:29:24,120 --> 00:29:26,800 layer in the fact that we're on poor quality land. 543 00:29:27,520 --> 00:29:30,400 You know, we're, we've got the vagaries of the weather and, you 544 00:29:30,400 --> 00:29:33,440 know, and the, and actually the farming policy environment isn't 545 00:29:33,440 --> 00:29:37,080 terribly stable either. So yeah, we're, we're very happy 546 00:29:37,080 --> 00:29:39,760 with what we've done and we're really comfortable that we've, 547 00:29:39,800 --> 00:29:43,480 we've made the right decisions. But that's now kind of semi in 548 00:29:43,480 --> 00:29:47,480 hindsight, whereas at the time we were making those decisions 549 00:29:47,480 --> 00:29:51,280 that that wasn't quite so easy because we just had no idea 550 00:29:51,280 --> 00:29:52,600 whether this was going to work or not. 551 00:29:53,080 --> 00:29:54,440 Well, I bet. And then with those large 552 00:29:54,440 --> 00:29:58,080 upfront costs have been quite as scary few years I would have 553 00:29:58,080 --> 00:30:00,640 thought. Yeah, we've, we've mitigated it 554 00:30:00,640 --> 00:30:04,720 to some extent by stacking. So we have, we've Norfolk is 555 00:30:04,800 --> 00:30:07,040 generally in a neutral neutrality area and Wendling 556 00:30:07,040 --> 00:30:09,320 Beck is actually delivering nutrient credits as well. 557 00:30:09,320 --> 00:30:15,200 So we have managed to sell some nutrient credits quite early, 558 00:30:15,200 --> 00:30:18,160 which has given us some of the working capital that we need to 559 00:30:18,160 --> 00:30:21,920 then deliver the habitat. So the way we look at it from a 560 00:30:22,000 --> 00:30:25,400 kind of a stacking and an additionality perspective is 561 00:30:25,400 --> 00:30:29,320 that the nutrients basically pay for you to take the land out of 562 00:30:29,320 --> 00:30:31,320 production. So they're, they're, they're 563 00:30:31,600 --> 00:30:34,160 making up for that loss of income through that opportunity 564 00:30:34,160 --> 00:30:38,600 cost of farming it. The BNG then pays for delivering 565 00:30:38,600 --> 00:30:41,680 and managing those high distinctiveness habitats over 566 00:30:41,680 --> 00:30:44,400 the long term. So that's that's worked quite 567 00:30:44,400 --> 00:30:47,200 well for us. And should we, I mean, while 568 00:30:47,200 --> 00:30:50,080 we're on the topic of stacking and it's the topic we love to 569 00:30:50,080 --> 00:30:54,960 talk about in the UK in so in England, is it worth explaining? 570 00:30:54,960 --> 00:30:57,320 I remember about to explain it, but you will explain it better 571 00:30:57,320 --> 00:31:00,760 that you cannot stack with carbon because of the lack of 572 00:31:00,760 --> 00:31:02,920 additionality. I mean to what extent do you 573 00:31:02,920 --> 00:31:06,920 think that might change over time or is is should be a hard 574 00:31:06,920 --> 00:31:09,440 line? There's lots of opinions on this 575 00:31:09,440 --> 00:31:11,120 and it's quite a divisive subject, sorry. 576 00:31:12,440 --> 00:31:14,960 To bring it up. Yeah, my personal view is that 577 00:31:14,960 --> 00:31:17,680 we shouldn't have these stacking rules that you, they, they don't 578 00:31:17,880 --> 00:31:23,120 exist in any other walk of life. So if I, if I'm a farmer growing 579 00:31:23,120 --> 00:31:26,960 wheat, I can sell my my wheat forward on a contract to a 580 00:31:27,200 --> 00:31:30,240 buyer. That buyer doesn't asked me what 581 00:31:30,240 --> 00:31:33,120 I'm doing with the straw. And that's how free market 582 00:31:33,320 --> 00:31:37,120 economics work is that, you know, the markets effectively 583 00:31:37,120 --> 00:31:41,320 look after the the stacking and additionality through those 584 00:31:41,320 --> 00:31:43,400 market economics. But the the buyers are well 585 00:31:43,400 --> 00:31:46,360 aware that you might already been paying for something and 586 00:31:46,360 --> 00:31:50,400 that affects the value of 1 or other of the ecosystem services. 587 00:31:50,920 --> 00:31:54,280 It's helpful to us obviously, that we can stack biodiversity 588 00:31:54,280 --> 00:31:56,600 and nutrients. So that is allowed within the 589 00:31:56,600 --> 00:31:59,320 current stacking rules. You know, that's been a huge 590 00:31:59,320 --> 00:32:02,080 lifeline for us. We're not planning on selling 591 00:32:02,080 --> 00:32:04,840 carbon. We don't necessarily think that 592 00:32:04,840 --> 00:32:07,000 we need to sell carbon. We are measuring all of the 593 00:32:07,000 --> 00:32:08,760 carbon uplift within the project. 594 00:32:08,760 --> 00:32:12,240 So we're working with UKCH and the University of East Anglia to 595 00:32:12,240 --> 00:32:16,080 measure above and below ground carbon and actually to economy 596 00:32:16,080 --> 00:32:17,560 as as well. They're helping with that 597 00:32:17,560 --> 00:32:20,680 process and that's not necessarily with a view to 598 00:32:20,680 --> 00:32:24,840 trading that in the future. Although if the BNG market 599 00:32:24,840 --> 00:32:27,640 doesn't materialise to the extent that we would like it to, 600 00:32:27,640 --> 00:32:29,680 then it might, we might need to do that. 601 00:32:29,680 --> 00:32:32,640 So it's a, it's kind of a safety net for us that we could dip 602 00:32:32,640 --> 00:32:34,880 into the carbon market. We wouldn't, we wouldn't be 603 00:32:34,880 --> 00:32:37,200 double dipping. We would, you know, we would be 604 00:32:37,200 --> 00:32:39,160 using it as an alternative revenue source. 605 00:32:39,160 --> 00:32:41,600 But to be able to do that, you have to have a baseline and 606 00:32:41,600 --> 00:32:43,560 start the project before you start the transition. 607 00:32:43,560 --> 00:32:45,400 And you need to be able to measure that to a post 608 00:32:45,400 --> 00:32:49,760 intervention state if you like. I think when you get to much 609 00:32:49,760 --> 00:32:52,040 bigger projects, and I'm thinking particularly of the 610 00:32:52,040 --> 00:32:55,480 landscape recovery projects, stacking really becomes an issue 611 00:32:55,560 --> 00:32:59,840 because those projects are far more complicated. 612 00:32:59,840 --> 00:33:02,120 We're 4 land owners. Some of these projects are 50 or 613 00:33:02,120 --> 00:33:05,080 60 land owners. We're a couple of 1000 acres. 614 00:33:05,080 --> 00:33:08,280 Some of these big projects are, you know, 10s or even hundreds 615 00:33:08,280 --> 00:33:11,680 of thousands of acres. You can't deliver that scale of 616 00:33:11,680 --> 00:33:14,080 project through compliance markets. 617 00:33:14,080 --> 00:33:15,720 There just isn't the demand for it. 618 00:33:15,720 --> 00:33:18,800 And you're going to have a blend of different ecosystem services, 619 00:33:19,120 --> 00:33:21,760 particularly carbon. So carbon works particularly 620 00:33:21,760 --> 00:33:23,240 well for landscape recovery projects. 621 00:33:23,680 --> 00:33:26,120 But actually there are a number of those projects that are going 622 00:33:26,120 --> 00:33:30,640 to be Hanford by not being able to stack biodiversity alongside 623 00:33:30,880 --> 00:33:32,920 carbon. And I do think that's something 624 00:33:32,920 --> 00:33:36,760 that, you know, it's not about double counting, it's about 625 00:33:36,760 --> 00:33:39,920 actually making projects viable by getting them the finance that 626 00:33:39,920 --> 00:33:42,200 they need. Yeah, yeah, totally. 627 00:33:42,480 --> 00:33:45,200 Well, thank you for taking that question on stacking. 628 00:33:45,440 --> 00:33:47,200 And for those listening, if you're not familiar, landscape 629 00:33:47,200 --> 00:33:52,680 recovery is actually part of our new farming subsidy regime, 630 00:33:52,680 --> 00:33:55,640 would we call it? That's for, as it sounds, 631 00:33:55,800 --> 00:34:00,640 landscape scale projects with multiple farmers and land 632 00:34:00,640 --> 00:34:04,400 managers coming together and they typically have to produce a 633 00:34:04,400 --> 00:34:07,200 model that attracts both private sector. 634 00:34:07,200 --> 00:34:09,320 And then there'll be some element where the government 635 00:34:09,320 --> 00:34:13,040 will complement that through the subsidy or public funding if I 636 00:34:13,040 --> 00:34:14,239 have. So maybe let's talk about 637 00:34:14,239 --> 00:34:16,360 upfront finance because obviously there is a, there's a 638 00:34:16,360 --> 00:34:20,159 marketplace between, you know, a buyer of units and you're 639 00:34:20,159 --> 00:34:22,520 selling the units. But there is that point where 640 00:34:22,520 --> 00:34:26,679 you might need the upfront investment before you find the 641 00:34:27,040 --> 00:34:29,520 the buyer. Does that exist at the moment? 642 00:34:29,520 --> 00:34:31,520 I mean, how do we, how does that look in England? 643 00:34:31,920 --> 00:34:35,400 It's a bit of a hodgepodge. So depends on kind of right 644 00:34:36,280 --> 00:34:38,040 time, right place to some extent. 645 00:34:38,040 --> 00:34:40,080 So there are, there are people out there that will put C 646 00:34:40,080 --> 00:34:44,040 capital into projects if they are either answering a 647 00:34:44,040 --> 00:34:48,760 particular requirement or you know, they, they just happen to 648 00:34:48,760 --> 00:34:52,360 be in a, in a, in a good location or, or have an 649 00:34:52,360 --> 00:34:54,840 ecosystem service benefit that somebody really wants. 650 00:34:55,520 --> 00:34:58,600 Other more kind of speculative projects can struggle to get 651 00:34:58,600 --> 00:35:02,240 that early seed capital. So again, we, we talked about 652 00:35:02,240 --> 00:35:04,760 landscape recovery. That's a that's a great way of 653 00:35:05,200 --> 00:35:09,200 bringing some money for feasibility to get the projects 654 00:35:09,200 --> 00:35:12,440 off the ground for, for more kind of stand alone single 655 00:35:12,440 --> 00:35:15,560 estate compliance market solutions. 656 00:35:16,080 --> 00:35:20,080 That becomes more difficult to, to get to bring in the the money 657 00:35:20,080 --> 00:35:24,080 to do the feasibility. So baselining, you know, soil 658 00:35:24,080 --> 00:35:28,200 testing, design, legal structures, all of that sort of 659 00:35:28,200 --> 00:35:30,040 stuff costs quite a lot of money. 660 00:35:30,600 --> 00:35:33,920 So it's either at that point up to the landowner to to try and 661 00:35:33,920 --> 00:35:38,680 finance them that themselves or try and take on some debt to be 662 00:35:38,680 --> 00:35:41,320 able to do that. So in some ways it creates an 663 00:35:41,320 --> 00:35:43,800 opportunity for debt finance within there maybe through the 664 00:35:43,800 --> 00:35:48,480 banks, but I think the banks have been relatively slow on the 665 00:35:48,480 --> 00:35:52,240 uptake with compliance markets and and nature finance in 666 00:35:52,240 --> 00:35:54,560 general. And we're seeing that on the, 667 00:35:54,560 --> 00:35:58,000 the flip side of that coin is that if you have a charge on a 668 00:35:58,000 --> 00:36:01,960 piece of land that you need the bank's permission to enter into 669 00:36:01,960 --> 00:36:06,040 biodiversity net gain, the bank is unlikely at the moment to, to 670 00:36:06,040 --> 00:36:08,080 allow you to do that because they don't know what's going to 671 00:36:08,080 --> 00:36:10,080 happen to the long term land values. 672 00:36:10,080 --> 00:36:13,880 And the charges are all based on the, on what happens with those 673 00:36:13,880 --> 00:36:16,400 long term land values. And they know from a, if it's in 674 00:36:16,400 --> 00:36:19,960 farming, they can, they can predict that with new markets 675 00:36:19,960 --> 00:36:22,480 like biodiversity net gain, it's unpredictable when their 676 00:36:22,480 --> 00:36:27,200 computer basically says no. And you know, they are working 677 00:36:27,200 --> 00:36:29,800 through that at the moment. But that has caused a problem. 678 00:36:30,160 --> 00:36:34,400 Similarly, the, the kind of the risk profile of, of investing in 679 00:36:34,400 --> 00:36:36,840 BNGII would imagine is quite similar. 680 00:36:36,840 --> 00:36:40,160 I mean, if you go and want to borrow some money from a bank 681 00:36:40,160 --> 00:36:42,400 and you've got some assets that you can underpin that with, 682 00:36:42,400 --> 00:36:43,840 they're always going to lend you the money. 683 00:36:43,840 --> 00:36:46,680 But at the moment, all of the risk is on the landowner. 684 00:36:46,680 --> 00:36:49,800 And I think as the, as the projects mature and the, and the 685 00:36:49,800 --> 00:36:53,080 market matures, the risk gets mitigated. 686 00:36:53,080 --> 00:36:57,240 So we need some of these early projects out there to prove the 687 00:36:57,240 --> 00:37:00,720 model and and prove that the market works and then everybody 688 00:37:00,720 --> 00:37:02,840 becomes a little bit more relaxed about it. 689 00:37:03,360 --> 00:37:08,680 Yeah, yeah. So slightly changing topics, is 690 00:37:08,680 --> 00:37:13,560 there any sort of argument for social impact from biodiversity 691 00:37:13,560 --> 00:37:15,200 net gain? I know you've done quite a lot 692 00:37:15,200 --> 00:37:17,840 of work with communities, but if you could talk us through that, 693 00:37:17,840 --> 00:37:20,240 that'd be great. You know, I think on all of 694 00:37:20,240 --> 00:37:24,320 these, these nature recovery projects, the local communities 695 00:37:24,320 --> 00:37:27,400 and that wider society benefit is hugely important. 696 00:37:28,520 --> 00:37:30,960 I don't think there's any particular framework that 697 00:37:31,240 --> 00:37:33,920 predicates that at the moment that that needs to be part of 698 00:37:33,920 --> 00:37:37,800 the design or the the execution. I think it's more of a best 699 00:37:37,800 --> 00:37:40,640 practise approach at the moment that if you're doing something 700 00:37:40,640 --> 00:37:45,360 good for nature, you should look at the why, the bigger picture 701 00:37:45,440 --> 00:37:49,280 and start to integrate people into that mix as well. 702 00:37:49,280 --> 00:37:51,120 So we're very focused on kind of habitat. 703 00:37:51,120 --> 00:37:55,200 We use habitat as a proxy for species, but often the kind of 704 00:37:55,200 --> 00:37:58,120 the people living close to those sites or visiting those sites 705 00:37:58,120 --> 00:38:00,400 can be neglected from that design. 706 00:38:00,400 --> 00:38:03,960 So that's something that we've been quite conscious to try and 707 00:38:04,040 --> 00:38:06,600 make sure that we we encapsulate within the project. 708 00:38:06,600 --> 00:38:09,000 So we're doing as much as we can at the moment. 709 00:38:09,000 --> 00:38:11,960 So we are, we're engaging with, with local community groups, 710 00:38:11,960 --> 00:38:15,920 volunteers, we've put in a cycle path to kind of connect the 711 00:38:15,920 --> 00:38:19,520 local town centre to, to, for a couple of the villages. 712 00:38:20,160 --> 00:38:23,720 We've got people counters on the footpath network and the, and 713 00:38:23,720 --> 00:38:26,920 the cycle way to understand how it's being used and how those 714 00:38:26,920 --> 00:38:29,920 numbers change over time. You know, tracking people coming 715 00:38:29,920 --> 00:38:32,400 into the project, whether they're walking, running, 716 00:38:32,400 --> 00:38:35,240 cycling, you know, we can because that's all part of our 717 00:38:35,240 --> 00:38:38,600 natural capital account. And we need to understand what 718 00:38:38,600 --> 00:38:41,040 the value is to wider society as well. 719 00:38:41,080 --> 00:38:46,320 And I think because we don't 100% understand how the finance 720 00:38:46,320 --> 00:38:48,280 of these projects is going to work at the moment. 721 00:38:48,280 --> 00:38:50,880 So we have a we have a model that we think is going to work 722 00:38:50,880 --> 00:38:54,120 through biodiversity net gain and selling environmental 723 00:38:54,120 --> 00:38:56,240 credits. But if those markets change or 724 00:38:56,240 --> 00:38:58,880 governments change and the policy goes or whatever it might 725 00:38:58,880 --> 00:39:04,440 be, we need to find a way to justify back to government, you 726 00:39:04,440 --> 00:39:07,400 know, public money for public goods at that point. 727 00:39:07,400 --> 00:39:09,640 So if we need to bring in subsidies in the future, for 728 00:39:09,640 --> 00:39:13,360 example, because you know, the compliance markets go and then 729 00:39:13,360 --> 00:39:16,040 we're going to need that data to be able to say, look, this is 730 00:39:16,760 --> 00:39:18,360 within our natural capital account. 731 00:39:18,360 --> 00:39:22,880 This is our impact on health and well-being or whatever it might 732 00:39:22,880 --> 00:39:25,200 be. So I think they're all really 733 00:39:25,200 --> 00:39:27,960 important, but I think there's just a general kind of feel good 734 00:39:27,960 --> 00:39:30,480 factor as well that you create something that you're proud of 735 00:39:30,480 --> 00:39:34,280 and a space for nature and you you want to be able to invite 736 00:39:34,280 --> 00:39:37,160 people in and, and kind of integrate with that and and 737 00:39:37,160 --> 00:39:39,040 connect with that as much as possible. 738 00:39:39,040 --> 00:39:42,640 There is always a balance between high distinctiveness 739 00:39:42,640 --> 00:39:45,560 habitat, species, recovery and people because they're not 740 00:39:45,560 --> 00:39:48,720 natural bedfellows and you tend to, you know, you get a lot of 741 00:39:48,720 --> 00:39:50,440 recreational disturbance and things like that. 742 00:39:50,440 --> 00:39:52,440 So you do need to think about it within the design. 743 00:39:52,960 --> 00:39:56,440 But we've been quite careful to keep the the really high 744 00:39:56,440 --> 00:39:59,200 distinctiveness areas separate from where we're encouraging 745 00:39:59,200 --> 00:40:01,880 people in. And this is a big question to 746 00:40:01,880 --> 00:40:05,160 wrap up here with you, Glenn. But given over the years you've 747 00:40:05,160 --> 00:40:08,320 had so many visits from government officials across the 748 00:40:08,320 --> 00:40:13,600 EU seeking to understand BNG, what's your sense on whether BNG 749 00:40:13,600 --> 00:40:17,600 is something that should and could be applied across Europe? 750 00:40:17,880 --> 00:40:19,920 You know, we're obviously testing this on a kind of a 751 00:40:20,280 --> 00:40:25,000 micro scale in some ways in, in England and we can see the 752 00:40:25,000 --> 00:40:28,600 potential for this as a, as a marketplace and as an 753 00:40:28,600 --> 00:40:32,160 opportunity to bring private finance into nature recovery 754 00:40:32,160 --> 00:40:36,640 and, and meet many of the government's metrics along the 755 00:40:36,640 --> 00:40:38,320 way. So it's a, it really is a win 756 00:40:38,320 --> 00:40:40,200 win economically and environmentally. 757 00:40:40,200 --> 00:40:43,960 It's a, it's a win win. Once you, you kind of amplify 758 00:40:43,960 --> 00:40:47,760 that to, to the scale of, of Europe or, or other kind of 759 00:40:47,760 --> 00:40:52,200 jurisdictions, it becomes more complicated, but also it comes 760 00:40:52,200 --> 00:40:56,960 with economies of scale and opportunities that, you know, 761 00:40:56,960 --> 00:40:59,160 are quite mind blowing from a nature perspective. 762 00:40:59,760 --> 00:41:03,600 And I, I think looking at something like BNG across Europe 763 00:41:03,600 --> 00:41:06,720 would just have so much potential, not just from a 764 00:41:06,720 --> 00:41:10,240 finance point of view, but from a, from a nature delivery and a 765 00:41:10,240 --> 00:41:12,720 people perspective. And, and actually that kind of 766 00:41:12,720 --> 00:41:16,400 cap reform piece as well as to, as to how that works over the 767 00:41:16,400 --> 00:41:18,760 long term. I think that the lessons that 768 00:41:18,760 --> 00:41:21,880 we've learnt and are still learning on a daily basis from 769 00:41:21,880 --> 00:41:26,440 BNG in England are definitely relevant and replicable across 770 00:41:26,440 --> 00:41:30,120 those kind of geographies. And you know, in an ideal world, 771 00:41:30,120 --> 00:41:33,920 this would be a, it would be a global kind of roll out for, for 772 00:41:33,920 --> 00:41:36,760 biodiversity and climate as well, because the two are 773 00:41:36,760 --> 00:41:38,960 intrinsically linked. They kind of go hand in glove. 774 00:41:38,960 --> 00:41:43,320 And I think we can all see from just turning on the news that we 775 00:41:43,320 --> 00:41:46,960 are are facing some pretty significant challenges. 776 00:41:46,960 --> 00:41:49,760 And, and no matter how much governments bury their head in 777 00:41:49,760 --> 00:41:54,040 the sand or because it's not convenient, it's coming. 778 00:41:54,080 --> 00:41:56,520 And sooner or later the penny will drop. 779 00:41:56,520 --> 00:41:58,280 But we need to be able to do something about it. 780 00:41:58,640 --> 00:42:01,080 And as you say, compliance markets are doing that. 781 00:42:01,680 --> 00:42:04,320 And I also mentioned earlier that Vanessa Garcia, when she 782 00:42:04,320 --> 00:42:07,280 was on a couple of weeks back was sharing how they are being 783 00:42:07,280 --> 00:42:10,080 adopted across Latin America and even in, you know, some parts of 784 00:42:10,080 --> 00:42:13,760 Africa and Southeast Asia. So it does feel like the EU is a 785 00:42:13,800 --> 00:42:15,960 little behind, if I can say that. 786 00:42:16,560 --> 00:42:18,800 But thank you, Glenn. It's really great to have this 787 00:42:18,880 --> 00:42:22,080 on the ground view and stay where you are as Thomas is going 788 00:42:22,080 --> 00:42:31,960 to come and rejoin us. So, Thomas, welcome back. 789 00:42:32,480 --> 00:42:35,800 And I know you know well the experience Glenn has been having 790 00:42:35,800 --> 00:42:37,760 on the ground and what he's just shared here. 791 00:42:38,160 --> 00:42:40,760 But we thought for this final 10 minutes, it would be really 792 00:42:40,760 --> 00:42:44,600 great to have you both here to share with us some of these sort 793 00:42:44,600 --> 00:42:46,920 of final thoughts. And the first is really about 794 00:42:46,920 --> 00:42:49,000 the challenges. So Thomas, we talked about some 795 00:42:49,000 --> 00:42:53,400 of the detail around small sites exemptions and on site delivery, 796 00:42:53,880 --> 00:42:57,200 but where else do you see the biggest gaps between the policy 797 00:42:57,200 --> 00:43:00,040 design and that implementation on the ground? 798 00:43:00,280 --> 00:43:03,760 I think from a policy systems lens, I think the biggest gaps 799 00:43:03,760 --> 00:43:06,280 that we're seeing is around regulation and monitoring, 800 00:43:06,480 --> 00:43:08,960 especially monitoring. We don't really have a central 801 00:43:08,960 --> 00:43:12,520 regulator tasked with like enforcing BNG or holding people 802 00:43:12,520 --> 00:43:16,000 accountable to those agreements and penalising non compliance, 803 00:43:16,000 --> 00:43:18,800 for instance. And so like, although we call it 804 00:43:18,800 --> 00:43:21,640 a regulated market, you know, it's not a very tightly 805 00:43:21,640 --> 00:43:24,680 regulated market in in the actual practicalities. 806 00:43:25,280 --> 00:43:27,960 And, you know, local planning authorities also just don't have 807 00:43:27,960 --> 00:43:32,600 the capacity to be assessing what's going on on the ground, 808 00:43:33,000 --> 00:43:35,520 both in terms of the the applications to create habitat 809 00:43:35,520 --> 00:43:38,080 banks or, you know, the continuous monitoring. 810 00:43:38,080 --> 00:43:40,080 And so that does create blockages in the systems. 811 00:43:40,400 --> 00:43:43,200 And you know, a report recently from IES found that, you know, 812 00:43:43,200 --> 00:43:45,600 local planning authorities are being really overwhelmed by 813 00:43:45,600 --> 00:43:50,120 section one O 6 demands that legal agreements to secure an 814 00:43:50,120 --> 00:43:52,920 area for 30 years. And then I think finally and 815 00:43:52,920 --> 00:43:56,400 this has come out of our work in Norfolk, is that gap between 816 00:43:56,400 --> 00:44:00,200 upfront invested investment needed to deliver and verify in 817 00:44:00,200 --> 00:44:03,280 that gain and the returns from the sales of BNG credits. 818 00:44:03,600 --> 00:44:07,680 And so you know what you can see is farmers or lenders not being 819 00:44:07,680 --> 00:44:10,120 willing to put up that significant upfront capital 820 00:44:10,480 --> 00:44:13,040 where we're in what is still a fairly nascent market. 821 00:44:13,560 --> 00:44:17,200 So I think more support around that kind of gap would be 822 00:44:17,200 --> 00:44:19,800 helpful. Yeah, I think there's something 823 00:44:19,800 --> 00:44:24,680 around policy stability as well and the, and the kind of the 824 00:44:24,680 --> 00:44:28,680 market to supply and demand side of things for BNG. 825 00:44:28,680 --> 00:44:34,640 So to be able to invest in projects that are delivering 826 00:44:34,640 --> 00:44:38,160 sort of long term biodiversity benefit, you have to make sure 827 00:44:38,160 --> 00:44:41,560 that the goal posts are fixed in place for a period of time. 828 00:44:41,720 --> 00:44:45,360 And you know, we're looking at kind of long term 30 year 829 00:44:45,360 --> 00:44:50,040 delivery and we have to be sure that the policy environment is 830 00:44:50,040 --> 00:44:53,720 stable enough to be there at the end of that process to be able 831 00:44:53,720 --> 00:44:55,920 to invest in it. And I think we we haven't 832 00:44:55,920 --> 00:44:58,920 necessarily had that today. You know, it's, it's been 833 00:44:59,440 --> 00:45:02,520 slightly lumpy in terms of the roll out and now we're going 834 00:45:02,520 --> 00:45:05,600 through a whole other consultation around small sites 835 00:45:05,600 --> 00:45:09,680 and and things that will materially potentially affect 836 00:45:09,680 --> 00:45:12,720 the market. So I think that's that's the 837 00:45:12,720 --> 00:45:17,200 principle thing from a supply side perspective is that you 838 00:45:17,200 --> 00:45:21,760 have to be sure that there's a market there to that is going to 839 00:45:21,760 --> 00:45:25,880 have the the required demand to, to to make it investable. 840 00:45:26,200 --> 00:45:29,720 So as we say, it's a, it's a great policy, we're glad it's 841 00:45:29,720 --> 00:45:31,800 there. Obviously teething issues and 842 00:45:31,800 --> 00:45:35,920 any new piece of regulation, but definitely has the ability to 843 00:45:35,920 --> 00:45:39,320 mobilise what we all hope is private sector capital, not just 844 00:45:39,320 --> 00:45:41,760 maybe from property developers, but you know, hopefully large 845 00:45:41,760 --> 00:45:43,080 infrastructure providers as well. 846 00:45:43,440 --> 00:45:45,840 So just kind of wrapping up last couple of questions here. 847 00:45:45,840 --> 00:45:49,720 I'm really keen to ask you both. I mean, how do you sort of see, 848 00:45:50,120 --> 00:45:52,680 you know, what would you like to see in terms of the development 849 00:45:52,680 --> 00:45:56,760 of biodiversity markets? And that can be whether we you 850 00:45:56,760 --> 00:45:59,440 want to talk about these compliance markets, these units 851 00:45:59,640 --> 00:46:02,240 or whether it's more on the voluntary side or as Thomas was 852 00:46:02,240 --> 00:46:05,440 explaining to me earlier, the sort of in between, in between 853 00:46:05,440 --> 00:46:07,800 regulatory voluntary. In terms of where where we're 854 00:46:07,840 --> 00:46:10,680 going to see the biodiversity markets moving, I think we're on 855 00:46:10,680 --> 00:46:12,800 and up for this trajectory. It does depend who you ask. 856 00:46:12,880 --> 00:46:15,000 I talked to some of my colleagues who've been around 857 00:46:15,040 --> 00:46:17,880 longer than I have in this space and they remembered we bought 858 00:46:17,880 --> 00:46:20,840 back in the early 2000s and they were like, there was loads of, 859 00:46:21,280 --> 00:46:23,800 you know, energy and enthusiasm about their diversity markets 860 00:46:23,800 --> 00:46:24,880 back then. And we didn't go anywhere. 861 00:46:25,520 --> 00:46:28,960 And now we're having that kind of like curve of interest back. 862 00:46:29,560 --> 00:46:33,040 But I do feel like we're in a different set of circumstances 863 00:46:33,040 --> 00:46:36,160 as back then, you know, we have technologies and monitoring 864 00:46:36,160 --> 00:46:38,600 capabilities for biodiversity that we just didn't have back 865 00:46:38,600 --> 00:46:39,920 then. So the markets weren't 866 00:46:39,920 --> 00:46:43,080 particularly high integrity and we couldn't measure biodiversity 867 00:46:43,080 --> 00:46:46,240 gains as well as we can now. And I also think we're in a 868 00:46:46,240 --> 00:46:49,000 different space in terms of corporates and their 869 00:46:49,080 --> 00:46:51,360 understanding of biodiversity. You know, as we were saying 870 00:46:51,360 --> 00:46:55,280 before, we've got frameworks like TNFD and SBTN which are 871 00:46:55,280 --> 00:46:57,960 really alerting the private sector to their risks and 872 00:46:57,960 --> 00:46:59,880 dependencies. And I think there is going to be 873 00:46:59,880 --> 00:47:03,400 increased interest in these markets because of that. 874 00:47:03,880 --> 00:47:06,680 And we have, you know, the EU road map announced, we've got 875 00:47:06,680 --> 00:47:10,400 the IAPBS framework, we've got the work of the BCF and WEF. 876 00:47:11,160 --> 00:47:14,200 And so I do hope we see this kind of proliferation of 877 00:47:14,200 --> 00:47:17,920 national regulated schemes which are there to unlock private 878 00:47:17,920 --> 00:47:20,720 finance for nature while benefiting farmers, while 879 00:47:20,720 --> 00:47:24,160 benefiting local communities and helping, you know, close that 880 00:47:24,160 --> 00:47:27,360 finance gap. What I worry about is that 881 00:47:27,400 --> 00:47:31,280 potentially we start to see governments talk about private 882 00:47:31,880 --> 00:47:35,840 markets as a way to make the excuse that we don't need as 883 00:47:35,840 --> 00:47:37,680 much public funding going towards nature. 884 00:47:38,600 --> 00:47:41,000 You know, when we're constantly hearing about, you know, the 885 00:47:41,000 --> 00:47:44,080 worries around low growth and fiscal constraints, you can kind 886 00:47:44,080 --> 00:47:45,920 of see where that argument could come from. 887 00:47:45,920 --> 00:47:48,600 But I think we all need to be saying that it's public funding 888 00:47:48,640 --> 00:47:50,360 plus private markets or the other way around. 889 00:47:50,520 --> 00:47:53,200 You know, they they both need to be in the game and both need to 890 00:47:53,200 --> 00:47:56,880 be scaling up at the same time. And I think we're starting to 891 00:47:56,880 --> 00:47:59,880 see that heading in the right direction with the messaging 892 00:47:59,880 --> 00:48:03,960 that we're seeing from the EU framework and the IAPB. 893 00:48:04,640 --> 00:48:07,400 Yeah. So just just to expand on on 894 00:48:07,400 --> 00:48:12,480 Thomas's point there around the wider economy, we see the nature 895 00:48:12,480 --> 00:48:15,480 markets, it should be a triple win basically. 896 00:48:15,480 --> 00:48:19,440 So you know you can grow a whole green economy off the back of 897 00:48:19,440 --> 00:48:24,400 compliance markets, which also enhance your underlying natural 898 00:48:24,400 --> 00:48:26,840 capital. So to kind of deregulate that 899 00:48:26,840 --> 00:48:31,880 process and destroy nature as, as, as part of development, you 900 00:48:31,880 --> 00:48:33,880 know, it's just ludicrous because you're, you're 901 00:48:33,880 --> 00:48:36,800 destroying your natural capital which sits on the, the 902 00:48:36,800 --> 00:48:39,000 Treasury's balance sheet as opposed to enhance it. 903 00:48:39,000 --> 00:48:41,720 So you should have a kind of a triple fiscal win as part of 904 00:48:41,720 --> 00:48:45,840 these nature market framework. I think we're delighted with 905 00:48:45,840 --> 00:48:47,840 where BNG has got to at the moment. 906 00:48:47,840 --> 00:48:51,960 We're busy on wending back with, we're doing a probably somewhere 907 00:48:51,960 --> 00:48:54,640 between sort of 20 and 40 quotes a week at the moment. 908 00:48:54,760 --> 00:49:00,360 So I think the market is is working better than we expected 909 00:49:00,360 --> 00:49:05,600 it to at this point of its life cycle and for sure it needs kind 910 00:49:05,600 --> 00:49:07,760 of tweaking and evolving as we go forward. 911 00:49:07,760 --> 00:49:12,240 But I would not underestimate the the importance of having 912 00:49:12,240 --> 00:49:15,280 compliance market as the foundation for wider nature 913 00:49:15,280 --> 00:49:17,800 markets. Without those compliance markets 914 00:49:17,800 --> 00:49:21,440 there, the the voluntary markets start to become eroded. 915 00:49:21,440 --> 00:49:24,840 We're pleased that there seems to be commitment to 916 00:49:24,920 --> 00:49:29,760 infrastructure by 2020, May 2026 now I think so that's really 917 00:49:29,760 --> 00:49:32,520 important for the BNG market to have infrastructure playing 918 00:49:32,520 --> 00:49:36,680 apart and and being bound by the same conditions and principles. 919 00:49:36,680 --> 00:49:40,320 And, and some of the, the proposals for infrastructure in 920 00:49:40,320 --> 00:49:42,640 the consultation, I think we're really positive as well. 921 00:49:43,640 --> 00:49:47,400 But we've also got policies like TNFD sort of coming down the 922 00:49:47,400 --> 00:49:51,880 line, which will be really, really important in helping to 923 00:49:51,880 --> 00:49:55,440 deliver a wider voluntary nature market. 924 00:49:55,480 --> 00:49:57,880 I think if you've got those two things together, then you can 925 00:49:57,880 --> 00:49:59,560 really guide to go places with this. 926 00:49:59,560 --> 00:50:03,040 And to Thomas's point, it's not a substitute for for public 927 00:50:03,040 --> 00:50:06,640 money, but having the ability to blend, you know, really 928 00:50:06,640 --> 00:50:10,400 significant sums of private money through either compliance 929 00:50:10,400 --> 00:50:14,000 markets or voluntary markets that are underpinned by 930 00:50:14,000 --> 00:50:17,760 compliance markets will allow governments to deliver the 931 00:50:17,760 --> 00:50:20,320 targets that they're required to meet. 932 00:50:20,640 --> 00:50:22,720 So I think that's a good point to end on here. 933 00:50:22,720 --> 00:50:26,440 So thank you so much, Glenn and and thank you so much Thomas as 934 00:50:26,440 --> 00:50:29,080 well for all your time today. A really, really rich discussion 935 00:50:29,080 --> 00:50:32,720 on BNG and the broader European landscape on biodiversity 936 00:50:32,720 --> 00:50:34,840 credits and appliance market. So thank you. 937 00:50:35,040 --> 00:50:35,960 Thanks, Helen. Pleasure. 938 00:50:43,880 --> 00:50:47,040 So that's it for this week, and you can find out more about 939 00:50:47,040 --> 00:50:51,640 Wending Beck, including multiple case studies on the GFI Hive 940 00:50:51,640 --> 00:50:54,080 website. And that's under our main 941 00:50:54,080 --> 00:50:58,240 Investment Readiness toolkit. You'll find all the case studies 942 00:50:58,240 --> 00:51:02,640 there which go into a lot of detail about how it's worked and 943 00:51:02,640 --> 00:51:04,640 what Glenn's been doing for the last five years. 944 00:51:04,880 --> 00:51:08,480 And you can also find the paper that Thomas mentioned, obviously 945 00:51:08,480 --> 00:51:10,840 over on the Nature Conservancy's website. 946 00:51:11,400 --> 00:51:14,880 We are going to be saying on this Compliance market Rd that 947 00:51:14,880 --> 00:51:18,680 we've started along and I'm going to be joined by Tim Male 948 00:51:18,680 --> 00:51:22,040 from the Environmental Policy Innovation Centre in the US, 949 00:51:22,040 --> 00:51:24,880 also known as EPIC. And he's going to be joining us 950 00:51:24,880 --> 00:51:28,560 next week to talk about mitigation banking in the US and 951 00:51:28,560 --> 00:51:30,800 the importance of these policy leavers. 952 00:51:31,040 --> 00:51:33,200 Until then, I hope you have a great week.