The Mishcon Academy
Incorporating Biodiversity into Business
Alex Rhodes, Head of Mishcon Purpose
Today’s focus is on the emerging regulatory and legal regimes in three fundamental economic sectors. In real estate, in investment and in agriculture and these developments seek to incorporate biodiversity and biodiversity risk into business practices.
Ben Goldsmith, Chief Executive, Mehaden Plc and Non Executive Director, DEFRA
Some would argue that we all have this, this love of nature within us, even those of us that don’t know it. The term that E O Wilson the writer coined was biophilia, which describes the innate love that human beings have for the non-human world and his idea was that, that in many people there is a dormancy in that biophilia but it’s not so far from the surface, you know, an apartment overlooking Central Park will sell for twice one that doesn’t, you know, we, we crave on some level contact with nature. I think the Agriculture Act 2020 is… represents the biggest win for nature we have ever seen in this country. 75% of England is farmed and under the Common Agricultural Policy there was a direct incentive to farm every square inch so you got your payments based upon the amount of farmable land that you own. So if there is scrub the eye in the sky sees that scrub spreading or you have a little wetland which is full of bulrushes, that is not farmable land so demonstrably you must remove that nature in order to make it farmable in order to get the subsidiaries. Therefore a direct incentive was created to farm intensively every square inch no matter how suitable for farming. That direct incentive has now been flipped on its head under the Agriculture Act. So the new scheme which operates under the slogan ‘Public Money for Public Good’ with a, with a more technical title, ‘The Environmental Land Management Scheme’ will directly reward farmers for acting for stewards of nature, for rebuilding nature.
James Scott. Group Director of Strategy and Planning, Urban&Civic
Biodiversity net gain is part of the importance of green infrastructure and the Environment Bill and biodiversity net gain does not change the habits regulations, it doesn’t impact upon the importance of our environmental impact assessments. It is very, very specific around the boosting of biodiversity and the interesting point really and the starting point is that it’s boosting biodiversity within the red line. Fundamentally for me and for the way in which we as a company bring things forward and actually the development industry as a whole and in response to the way in which people are appreciating green spaces, the importance is to deliver on site. And how do you go about doing that, well you have to be really structured in the way that you do it, you really have to think about it from the very outset and you have to be able to incorporate and make your green spaces as multifunctional and as, and as valuable as you possibly can. We are moving up to an average at the moment of about 6.9% biodiversity net gain on our site and we have a target of hitting 12% biodiversity net gain across our sites by 2025. But we are heavily investing in that and putting those frameworks in place for our teams and so the developers in the room, that’s the challenge. You’ve got to be acting now, it is not something that is easy to do and I really hope that people don’t therefore think it is just something that they can pay away and hope that it will, it will all be alright because that will miss the point and miss the importance of actually achieving onsite biodiversity net gain.
Holly Story, Head of Environment and Sustainability, GSC Grays
Agricultural production of course relies on natural systems, whether pollinators, water quality and supply, soil microbiology and so on we really rely on all of those natural assets and systems in order to produce food from the land. Unfortunately the intensification of agriculture has all too often gone hand-in-hand with the depletion of natural capital. Over time we have been consistently taking out more than we have been putting back in and farming has made a substantial contribution to biodiversity loss. Now though we are being challenged to help to turn that tide, to be part of the solution.
Dr Vian Sharif, Head of Sustainability, FNZ, and Founding Member of NatureAlpha
Things are different today because we are at the nexus of three important trends. One, we have policy makers, Ben’s talked about these and so have my fellow panellists. Policy makers are recognising that the systemic threat has to be addressed and we are seeing policy come into effect, we are seeing nature being valued. Think about the Dasgupta Review for example. This exemplifies a change in what is going on. Secondly, we have awareness, we have individuals who lived through Covid, who are experiencing nature, who want to understand what is going on around them and how they can have influence. But finally and perhaps the biggest and most profound trend is technology. Technology means that we can harness incredible insights, incredible amounts of data, satellite imagery, geo location imagery, financial aspects of what companies are doing, what companies are actually getting up to, their reputational risk and we can bring all that together to actually start to quantify risks and opportunities to companies. We know that we can have a vision and we can achieve a vision that the global economy can work for nature as well as investors. If we reduce risk to investors they will be more encouraged to invest and if we create a virtuous cycle then we should be able to improve things for future generations and for the world to come and so that is why we can continue this mission to make sure that every dollar invested in global capital markets is aligned with nature positive outcomes.
Anita Ravera, Partner and Head of Planning, Mishcon de Reya
I think that the immediate take away is that it is incredible that now the whole idea of natural capital is in our daily language and a recognition in a way this never happened before that actually nature and the health of our eco system really represents the health of our economy and I think you really, you brought that to light and we have to value it and we have to protect it and we have to preserve it.
Ben Goldsmith, Chief Executive, Mehaden Plc and Non Executive Director, DEFRA
I think a fundamental challenge to all of this is to ensure that public money doesn’t crowd out the private finance for this stuff and to make it easy for land managers to stack a bunch of payments. So obviously you don’t want additionality whereby someone is being paid by Microsoft for the voluntary carbon associated with pine trees as well as, as well as being paid by the Government to plant those trees you can’t have additionality but what you can have is a land owner paid for flood mitigation by the Environment Agency for cleaner water by Wessex Water and by Microsoft for carbon so you, you can stack the benefits and therefore stack the payments and we need to make that possible and easy, especially for smaller farmers where you’ve got a guy who is spending you know, seven days a week on the back of his tractor, maybe doesn’t even have a smart phone, you know, you’ve got to try and make that easy for farmers to come together in clusters and to create a stack of payments that optimise their revenues from these things. Self-willed nature delivers outcomes that we couldn’t even have begun to predict and sometimes for example you know, we, we’ve been led to believe that a species thrives in a particular environment when in fact it was simply driven there, it was the last place it survives. Turns out that Golden Eagles don’t necessarily prefer bleak mountain tops, it just turns out that that’s where they survived and actually Golden Eagles do perfectly well in, in lowland, mosaic scrub forests so this idea that, that we just let nature kind of do it I think needs to take root and we need to move away from this kind of very tight set of perimeters in nature restoration whereby we are going to manage that hillside for this particular dung beetle because its scarce. We are going to actually try and restore natural processes, restore the nature meanders of streams, you know, restore the natural hydrology and then just let nature do it.
James Scott. Group Director of Strategy and Planning, Urban&Civic
One of the big elements that sort of the… has certainly resulted in a, in a reduction in species is the blockage of pathways across areas and we, we do therefore need to absolutely look at that and how then development fits in to that so I would expect within the next few years you properly start to see Local Authority plans with green strategies within them which are coming from the local nature recovery strategy concept which are showing exactly that and showing that if a development is going to come forward in a pathway that that development has to accommodate that pathway but planning and strategies of that ilk take time to come forward but there is now an absolute incentive on them to do so and they will need investment.
Holly Story, Head of Environment and Sustainability, GSC Grays
For a lot of the people that we work with the biodiversity loss is a lot more tangible and a lot clearer than climate change because it’s a direct comparison to what did I see when I was five compared to what do I see now I am sixty five. You can see it, you can hear it, the level of bird song on a morning in a lot of areas so for me that makes it easier sometimes communicating with farmers and land managers on biodiversity compared to climate which I think some people over the last few years we have had more extended drought periods, more significant rainfall evens that are affecting production and that is starting to be linked back to climate change in people’s minds so that is becoming a bit more tangible but I still think there is a long way to go in terms of people understanding the risk to their business of climate change as opposed to it being something that’s being imposed as an agenda from outside.
Ben Goldsmith, Chief Executive, Mehaden Plc and Non Executive Director, DEFRA
We are seeing a growing recognition of the economic value of healthy ecosystems that didn’t exist previously so a mangrove previously was worth however many shrimp you could produce on it if you cut away the trees and grew shrimp there for five or six years until the, until the place was too full of salt and degraded you couldn’t use it anymore well now there is a greater understanding around the world that a mangrove forest provides a whole bunch of tangible economic benefits from protection against Tsunami’s and storm events, protection of sensitive coastlands and production of sand on which the tourism industry depends. Nursery ground for 90% of tropical edible fish. There is an economic value to a mangrove forest that stretches way beyond its value for firewood and a few years of shrimp production and I think we are starting to see those, those imbedded into the economy and that is why Mark Carney believes that just voluntary carbon will be worth a hundred billion dollars a year by 2025 and so that is where the opportunity lies for people in the city of London is participating in those markets.
Dr Vian Sharif, Head of Sustainability, FNZ, and Founding Member of NatureAlpha
What I think is different is that we are entering an age of radical transparency. Now I am an optimist, I think most conservationists are, we have to be. We can see using satellite technology what is happening on the ground, we can see forests being cut down, we can look at global forest watch, you can get real time information, you can get water stress information, you can understand what companies are doing using deep learning. You can understand exactly what is going on with companies and their activities on the ground. You can see what’s happening and that is why I believe we are entering a new age where we can actually start to see and track what is going on and that’s what I think is different because once we start to quantify that, measure it, I don’t think we can… it’s like a tube of toothpaste, it’s out there and I fully believe as Ben said, that in the next couple years we are going to see a launch, potentially of a new asset class in nature markets but we are going to see nature markets. It’s going to happen, it’s happening and I don’t think we can come back from that particularly with the monitoring techniques that are available to us today that potentially weren’t available to us in 2014 or before.