A roadmap for biodiversity net gain

During this conversation, Julia and Phoebe touch on:

• Nature markets and private finance
• Making the career shift to sustainability
• Biodiversity net gain (BNG)
• Challenges in the BNG market
• Importance of collaboration

Welcome to Mott MacDonald's podcast Nature Positive, The Inside Story. In this podcast series, our host, Julia Baker, will be talking to industry leaders and experts about nature related policy, advisory law, and much more. 

In today's episode, Julia sits down with Phoebe Tucker to discuss GFI's newly published BNG road map and the latest updates on nature markets. 

Don't forget to subscribe and most importantly, enjoy this episode. 

Phoebe, welcome to our podcast, Nature Positive, The Inside Story. It's lovely to have you here. 

Thank you. It's lovely to be here. 

What do you do for a job? 

So what I do for a job, I focus on how to unlock private finance for nature, and that is a broad kind of mission, but I focus particularly on the role of nature markets. So essentially what happens when we approach nature and all the services that it provides us, specifically ecosystem services, and look at that through a market lens. So if we were to build in the cost of nature and the benefits that it gives us into everyday business decision-making and then introduce a market based mechanism, such as trading between sellers and buyers, what does that look like and how can we build markets that really work for nature and not shift money around? 

Basically, December 2021 you moved from the banking sector, I mean it was kind of banking in England, and then you moved to this this job that you got with the Green Finance Industry, Institute. Why did you move? 

Good question. I moved because I felt that I had taken a lot from my job in a, in a core High Street bank. I, at the same time, I was volunteering at a sustainability employee-led network that a couple of friends of mine started and I ended up enjoying that more than my day job.  

Always the way. 

Yeah, it's always the way. You know, it's kind of it's side of desk thing, working on kind of, you know, looking at bank products through a green lens and engaging employees to be more empowered to kind of speak up within their teams about what they can do. And, you know, upskilling and like teaching about, you know, sometimes it was just having fun learning about things like, like blue carbon. 

But, you know, three years in, I kind of decided the writing's on the wall, I really need to shift to a job with sustainability at its core and reflecting further on that because sustainability is so broad. I realised that I was quite frustrated with the fact that banks in general and the finance sector were focused a lot on the net zero agenda. And there was a lot of talk about decarbonising and, you know, reaching net zero and setting, setting goals. But I, I was thinking, you know, by 2050, if we meet those carbon goals but our waterways are in terrible shape and our pollinator species are all decimated, you know, all that kind of other stuff, people call it other stuff, that nature provides us... 

What happens if that's not there? So I, you know, started interviewing at different organisations and I, in the interview with Green Finance Institute, it wasn't specifically for a nature role. They were sort of looking for people to, to join their teams overall. 

They asked me what really interests you in the sustainability agenda and I said exactly what I've just said. I said, you've got anything to do with nature, Put me on it. And my current line manager, my current boss was in that meeting and she said we've just got funding for a nature associate. 

That's brilliant timing? 

Yeah, really brilliant. I just think, you know, sometimes when that timing happens, you're like, right, this is actually something, you know, and you've really got to see it. 

And you're so right. I think it's, it's also, it, it can be quite difficult when you're just starting up your career. You've already got a job. To take such a pivot is actually quite a brave move. 

Well, I was really, really excited. I think, you know, I was quite nervous kind of leaving, leaving the banking world and, and joining this... this traditional career. Yeah, traditional career and, you know, working for a much smaller company that was still very much plugged into the bank, banking sector and, and you know, my core interests of finance and markets. 

But, you know, it's just such a great team at GFI and a great culture and I, you know, work with people every day that really believe in what they're doing and get to kind of, you know, we, we, we definitely support each other. 

So quite, quite, quite a move. 

I mean, there were people at my previous job that were really passionate, obviously. But it's great when you're all kind of working towards the same thing and you're all excited to learn. 

So the Green Finance Institute this August published a road map. Now it published a road map about biodiversity net gain and we're, we're going to abbreviate that to BNG. So, but it was really focused on biodiversity markets and it looked at all the challenges with the biodiversity net gain markets and it produced this road map to take action. 

And I have to say it was a breath of fresh air. And it really made me realise actually that this was the first time really that someone had looked in detail about the market side of biodiversity net gain and got mandatory net gain. Because before all of that, I mean, of course there was discussion about biodiversity net gain, but it was a lot about biodiversity metrics, you know, about how do we get to development following the mitigation hierarchy, producing more wildlife rich habitats. 

There was some talk about biodiversity markets, but not to the level that you went into. What was the original intention behind that? 

Well, we, we have a great network of different stakeholders both on the supply and the demand side and you know, and the, the finance sector also. And so we were hearing quite a lot of concern about, you know, yes, the BNG is an amazing opportunity. We're really excited about it. But we also see that there are some things that, in the design of this market structure, we think there are serious gaps that could really minimise the potential of it. 

So we decided to first come up with a briefing letter, a briefing note really. And that was a really quick kind of seven page summary of the high priorities for government. And we put that out on the 12th of February when biodiversity net gain was made mandatory for major developers. And then, you know, beyond that, we realised that there was real value in digging even deeper into the things that maybe weren't kind of the pressing urgent priorities that we covered in the briefing note, but also, you know, the things that longer term need to be sorted out. And so we realised that there was real value in almost doing a kind of a diagnostic report, if I'm being honest, it kind of reads like that with, you know, the number of challenges it, it, it details. There was real value for both government and for industry to have that consistent view in one place that reflects multiple, multiple stakeholders' views. So we really wanted to influence government. 

Yeah, because it, I mean, it's an interesting mix. Can I just, so what's your definition of the biodiversity net game market? 

It's the, it's a good question. It's really the recognition of how gains can be, gains can be delivered by different parties. So, you know, thinking about supply of biodiversity net gain that can happen with developers on site. They can build, you know, habitats into their developments, into their plans but also they can pay for farmers, land owners and Wildlife Trusts to deliver that nearby. 

So it kind of represents the transfer of liability for those long-term habitat outcomes to be delivered. So you're buying a unit in BNG terms, but actually you're paying for the delivery of a habitat over 30 years. And when you looked at and started unpacking, I know you undertook a series of interviews and or the literary review, you interviewed so many people.  

What was your greatest challenge to actually, OK, we've got the road map, let's go deeper. Let's really unpack this. When you were going through that road map, what's your challenge? 

I think it was really balancing views and because BNG is such a new, a new space, I know, I know we've been building it for like 10 years, and I say 'we', government and the market have been working up to this for over 10 years actually. But when you put a market lens on something, there's a lot of mistrust, I'd say, and a lot of people who have quite strong opinions about the way things should be done or, or other people's practises, other organisations and why are they in the market? 

Why are they providing the service and what, how are they doing it? And, you know, and so I kept on hearing quite critical views of all these different components and all these different groups and, you know, people having strong views. But I really had to work on tempering that and hearing the other side. 

And you know, in this space, there are so many examples of where one person might have a really critical view about something, but then you'll go talk to another person and they'll explain, actually, there's a really good reason for why that's happening the way it is. And it's not perfect, but you know, don't, don't knock it out, don't knock it out and work with people instead of kind of assuming the worst. 

But I, I think you're right actually, because I think when mandatory net gain came in on the 12th, it was so different. I mean, it was, we were all in the most aware of biodiversity net gain, but mandatory net gain was so different. And I certainly didn't anticipate just how different it would be. You know, we had all these, we had the statutory biodiversity metric, that was different. We had the biodiversity gain hierarchy, the, you know, all of these quite technical requirements to meet to deliver biodiversity net gain. And then we actually had what is now a formalised market because before it was, you know, kind of like, you know, individual transactions or, you know, whatever that might be. So I, I think you're right. 

I, I think it's important to recognise how new that was, even though there had been a long build up in the, you know, the voluntary space for biodiversity net gain. But I also think you’re right, it’s people and you know, myself included, there’s so much that rests on biodiversity net gain because it is such a turning point and a milestone that we do need to come together and get it right. 

But it does divide opinions. 

Yeah, yeah, definitely. And I think that’s the unexpected value of the roadmap because we set out thinking, you know, we’re going to be really helpful to government and really synthesise views from over 100 different market stakeholders, you know, really, really trying to help and be solutions-led as well and recognise where industry can play a bigger role alongside government. But the unexpected benefit of the road map from where we’re sitting is that actually it does put people on a common understanding of what it is. 

So you as a farmer, for example, might think the challenge is X, but then you build in, you know, the wider picture and how all these other challenges intersect. And then all of a sudden and you’re talking to your local planning authority or your responsible body in a different way and you kind of understand why they might be operating the way they’re operating. 

And so I think it was just really good for clarifying what’s out there and what the challenges are as well as the potential solutions. And I think you capture that with a market lens that we don’t capture that from a sort of biodiversity net gain metric lens, because the market is all about, you know, what people believe and how the behave and those kind of market forces. 

Obviously, there's the economics behind it. But from, you know, metric, a biodiversity point of view, it's skills, it's competencies, it's looking at the metric rather than are people trusting and investing in that market? 

Yeah, there has to be trust or there has to be enough transparency that, you know, not even trust in other people, but trust in the governance of the system to really understand, you know, there are enough checks and balances, I can get on and do what I'm doing with confidence. 

But I also know that, you know, there is enough transparency and certainty to operate with other people.  

Yeah, can't just do it all yourself. 

You have to, you have to put your faith in the system a bit. And I know just how hard you worked on that. I mean, we had a couple of sessions and you were so dedicated and devoted.  

And it really is, it's, it's a fantastic piece of work. But I was just wondering why did you, where did that come from, from you? I mean, there were, there was, you know, obviously the importance that you recognised and the Green Finance Institute, you know, kind of put their, you know, if you like their company behind it. But from your kind of personal drive?  

I think I was really excited to work on a market with a compliance lens and thinking about, and, you know, there were numbers put out in the early days, before BNG was made mandatory, about what kind of volumes of finance could be flowing now that you've got this kind of mandatory scope. And so I thought this is brilliant because, you know, nature traditionally has not been as valued as other priorities within businesses and within sectors. 

So what happens if you just make it a requirement and you know, and, and, and, and since then I've reflected on the benefits of both where you can, it's a requirement, but it's not, it's not just developers having to do this. It's actually an opportunity for them. 

So it's the balance of kind of making a market compliance base, but also building in the opportunities for everyone. 

So I think, you know, compared to other things where, you know, the revenue models just aren’t as developed, BNG was almost like a supercharged moment to really, to really get money through fast, but you know, have everyone working together in a collaborative way.  

And I think also you really did. And when we talked about it, it was like the gap to fill. No one was having this conversation really to that level, you know, and this was actually, you know, that kind of important piece. 

Yeah, I think, I do think that it’s really surprising that we, we could fill that role because you know actually BNG, there’s so many people working on it. And I was so privileged actually to draw on so many conversations with people who were, you know, working on this for so long.  

So really we almost see our role there as convening all the great thinking out there and providing, as I said, that consistent kind of understanding, but filling that gap surprisingly. 

It was really great to do. So your road map has four pillars: market, central governance, supply side and demand side. Metrics and metrics, central government, demand and supply side. 

How could I forget the metric? But was there a pivotal moment when you thought those are the four pillars? Was there like, that was it or did it kind of just come out? 

Yeah. I think when it was, it came about when we were finishing up with the initial briefing note actually because those, we had two workshops with around 30 stakeholders and everyone came together to kind of talk about the high, you know, the near term, medium term and long term priorities that they would like to see addressed, right.  

But then we looked at that and it was a kind of a messy grid of three columns, but there was a lot there. And we thought, actually, let’s provide a different lens to this. Still keeping that kind of urgency short term, medium term, long term view but also building in how these changes interlink and how these changes interlink and how these changes might be perceived as the burden or the responsibility of, the most felt by certain actors within the market. 

So with the metric, it’s metric users. And that is a very, very broad bucket because we know that kind of a famer can open it up, a developer, LPAs as responsible bodies, government, even kind of people just interested in what it could do. You could be a community led organisation, and then thinking about, OK, so how does this metric work? 

But then you open it up and it’s so overwhelming initially and then you tap into kind of all the work that’s been done for it. And so, you know, we thought that the metric itself, people had some strong views about what it should be. So we thought, OK, great, that metric is one. And then, you know, the rest were quite natural as well. We saw that central government, there were a lot of challenges felt by local planning authorities and responsible bodies. Supply side. That’s again, such a broad bucket. 

And then the demand side was really, it was really key to build that into it, because without developers, none of this, it’s a, it’s a demand driven model. Without developers and their views, we’re not going to get there.  

It’s always interesting, isn’t it? When you’ve got such a big topic and you’re filling in this gap about markets for biodiversity net gain, it’s incredibly important to structure it, that people can access what you’re talking about, you know, because it was so comprehensive what you were doing. I really like those four pillars, I think they speak really well and I think they’re a big enough bucket. You’ve captured the theme of what’s really important without going too broad, if you like.  

Yeah, not going too broad was a challenge. Especially with the way we work, we really want to pursue everything to make sure we really understand what we’re talking about and we’re reflecting, we don’t want to kind of come in and develop a high level understanding and then skim along the top of what are the surface issues. It’s important to really follow the lead and go to, OK well let’s do that then. 

So let’s start with the biodiversity metric.  

So this is the statutory biodiversity metric. It is an Excel tool, but what it does, it uses data on habitats. So the ecologist, competent ecologist, will go out and survey habitats and they put the data in terms of metric, in terms of the habitat type, the area, the condition, strategic significance, and the metric automatically calculates what's called habitat units. And you calculate your total habitat units for your baseline and you've got to get 10% at the end of your development. And the metric looks at different types of units. So it's, I love it from the ecology point of view because it's been a habitat based approach. 

You know, we've come from this place of protected species and, you know, following the mitigation hierarchy, but having the, to really think about, well, how do those individual species fit together? But when you're thinking about those habitats, it was always the philosophy of, you know, build it and they will come, you know, what is, could be a really good proxy indicator for biodiversity gain. 

And it is just a proxy and the metric is one tool in the toolkit to design biodiversity net gain, but it is about habitats. So from the biodiversity point of view, there's always going to be an inherent limitation where you try to put a proxy finger, figure on biodiversity. 

Given that and given that it's one tool in the toolkit to design net gain, there's a lot of opinions, a lot of people have opinions about the, you know, whether it's right or not from a biodiversity point of view, but also it's the best out there that we have, quite frankly, from a market point of view. 

I was quite interested that you chose the metric because it's inherently a technical biodiversity tool, but I guess it's that transaction. 

You need to quantify what you're selling to really, really dig deep into outcomes. And, and you know, as you said, the metric is a proxy and it's always going to have its limitations and trade-offs. And especially the wider you go in terms of what you're measuring, what you're capturing, it's a huge accomplishment to design a metric that, you know, serves all of England's terrestrial habitats. 

So I really enjoyed learning about that. 

But from a market perspective, you know, are you paying for what, what are you, what exactly are you paying for? Are you paying for someone to come and install habitats, in which case that's, you know, activities based, or are you trying to incentivise them to really deliver uplift over the longer term? 

And the when you say uplift, what do you mean?  

So habitat restoration or creation. So you could start with, you know, a low distinctiveness habitat and build, and you know, do the... So low value, but you restore to it. 

Yeah. Back to it's former glory. 

Yeah, yeah, former glory. Or you turn the habitat into something completely different if the, if the conditions are right and that's why...  

So historical restoration of heathland or something. 

Yeah, exactly, exactly. And so it's, the metric is quite, it was really great getting to know the metric and how it does that with, kind of, because ultimately, it gives you a number and there's a risk always that people will try and up the number as much as possible in the most unsustainable way in order to get financial gains. 

So how does the metric temper that behaviour and building risk? 

It, you know, has difficulty to create multipliers, it has a time to condition multiplier, it has different risk multipliers that adjust according to if you're uplifting, if you're improving an existing habitat condition, or if you're kind of creating it from scratch. So it's really, it's been interesting to know, OK, how the, the metric is so crucial to market behaviour because we need to know exactly what we're selling. 

We need to have a number and a measure of impact and compensation, and that measure needs to be consistent. But beyond that, beyond just the basic function of a market, how are you incentivising good behaviour? And the metric builds into that. Yeah, but it's the people who use the metric. 

So the metric is, you're right, it's packed full of incentives and it packed full of penalties, you know, and it is first line of defence, you know, if, if, if you really take down that very high value habitat to get to net gain, it like really packed in all those contingencies. You're right. 

But if you restore habitats to a former glory, you know, there's all these incentives, but it's down to the person who uses it.  

And also the person who is checking that work as well. 

And so hopefully you want to, you want to believe that, that if there is a complete cowboy out there that's just looking for the biggest number that they can generate, there will be someone on the other end, for example, in the responsible body team or in the local planning authority, and they're saying you're planting, you're trying to plant forests on, you know, bogs or something ridiculous like that. What are you doing? Sense-check it. 

Yeah. So what was the one in your road map about the metric? What is, out of everything that you found, what is one point that you would like to make? What is that one headline? 

I think it is that there is no such thing as a perfect biodiversity metric and I think it needs to be iterative. I think that, you know, it's always going to use proxies. There's always going to be limitations. I think as long as we are working towards making it better and drawing on ecological data, because I think the next five years in particular, no, three years, sorry, where we get the statutory review, will be very interesting because I know there are a lot of people out there looking at exactly what the metric incentivises and what outcomes there are and collecting underlying ecological data as well. 

So how can we strengthen that proxy between habitat and biodiversity? Is it introducing measures of connectivity? Is it factoring in soil type, like soil? 

I, you know, learnt that soil actually has such a key part in, in, yeah, drawing biodiversity to a habitat. And so it's possible, it's possible to build that in. But we, we have to accept that the metric is going to need to be updated as we go. And you know, and hopefully we can, we as an industry, we as a market can move with it. 

Central governance. That was your second pillar. What do you mean by that? Central 

governance, so who is in the middle between the buyer and the seller? 

At a basic level, who's in the middle of the buyer and the seller? Making sure that market rules are being followed, that biodiversity, that the metric calculations are correct, for example, that transactions are being set up well, that they're following local, local and national policy. So, you know, at, at the very basic level, it's making sure things are running as intended.  

When you say market rules, the market's not regulated. 

Well, exactly. 

I mean, I think what rules do you mean? 

So I think it really touches on what I reflected on while we were developing the road map. Central governance is a bit of a misnomer. Yeah, in a way, because at the very top level there are rules set by Natural England and Defra, like, you know, a basic one will be you have to use the statutory biodiversity metrics. 

Yes, that's the right case. So there's there's legal requirements to legal requirements. That's at the top level. But the market is completely unregulated. Yeah, well, [indecipherable] is not selling habitat units. 

Exactly. 

And I think the most of the challenges, if not all of the challenges within that pillar are linked to local planning authorities and responsible bodies. They are the de facto market regulators in their own space. You know, definitely LPAs, especially, because they're checking the work of developers. But really people refer to the biodiversity net gain market as a national market. I realised and I think, you know, I think everyone realised up to a point after implementation that what you've got is actually something like 365 market, micro markets. I say 365 with an asterix because actually it was even a struggle to get a consistent answer on how many local planning authorities there in England, we kept on asking and people, some people said OK, there's 325, and then another person would say there's 370. 

And so we tried to like check our facts and figures and it was... 

They do change. 

Yeah, exactly. So people are working from different data sets, right. But every single local planning authority has their own local plan. Yeah, their own features of the planning system that, for example, asks for different information at different points. Section 106 agreements is a big one, the local land charge that is meant to legally secure the habitats. There are all these different conditions that LPAs could come out with. And then on top of that you've got trading rules. So, for example, I know that some local planning authorities have been found to refuse cross-border sales to say, we know that there's units here, we are going to refuse this order sale even though the spatial risk multiplier disincentivises you. 

We are actually going to say that's not good. And we, we, we, we want it on our patch or nothing at all. 

Fair enough. But it's, it's sort of pretty interesting, isn't it? Because I think, and what you drew out from the the road map is that I don't think people had said local planning authorities actually, so much of the the influence that they have in the BNG market, because it is planning policy, you know, compliance. 

So it's been talked about in a legal compliance lens rather than really influencing the market. And some local planning authorities have set themselves up as habitat banks. So they're actually interested in that supply-demand discussion while also having that influence on the market. And that's a, that's an example of a kind of a concern that people have to say, you know, is there a possibility of insider trading here? 

How much are conflicts of interests managed? Because, you know, I know why, I've spoken to LPAs who have set up their own habitat banks, and they say, you know, and there's actually, you know, you do... 

There's some brilliant ones. Brilliant. They filled a gap... And they do fill a gap and they say, they say we don't want to slow down development because we have our housing targets ready... 

No exactly. There was no one there. 

And also the even if there are people there's, they are very concerned with signing 30-year Section 106 agreements in exchange for a monitoring fee.  

Yes, if they're serving the offsite market in that way, they're signing an S106 agreement, they're receiving a monitoring fee. But actually there's such inconsistency with the, how monitoring fees are calculated. And they're thinking, am I going to, by signing on the dotted line, am I going to bankrupt my council in year 25 when we don't have enough money to carry out monitoring? 

And that's an extreme example, but they basically want to make sure that they're calculating the finances correctly, that they're having legal assurances. And they say we feel more comfortable just for now, you know, doing a couple of pilots ourselves and then get things up and running and then we can accept third parties like estate managers and farmers. 

You know, you've just raised something really important. And I think it's only when you start to really go through the process, because there was so much about how much does this biodiversity unit cost for a developer? 

No one really said, well, how much should a, and there was discussion about it, but, you know, how much does a local planning authority charge for monitoring over 30 years? 

Yeah. 

And you and you're right, actually, that's so important for the actual local planning authority to say, well, we need to get that cost right over 30 years. 

And when you bring it home, do you think the market should be regulated for biodiversity net gain? 

I think definitely, definitely more regulation. I think we need better data feeds. 

I think we should have, you know, more transparency and I think that there should be some mechanism to check things as they're going. I mean, I don't want to wait in 10 years down the line and hear about this massive scandal because there were, you know, core challenges within, within the governance structure that just meant things slipped through the net. And it could be that because it is a new market and there's only, you know, you learn so much from, you know, the reality of how things are going. 

But you need, I think, an oversight that kind of captures things as they're happening rather than, you know, all the, half the habitats are wiped out because of this.  

Yeah, exactly. 

Yeah. 

And do you have a sense of what's more effective, because there's standards for markets, you know, the British Standard Institute is working on various nature market standards versus regulation. 

I always think it's quite an interesting one. Again, it's, it's like, you know, the behaviour, you know, standards like relate to performance and, versus regulation, I've got to toe the line here. 

Do you have a sense of what would be...? 

I do think that third party verification is preferable. I think that you can have as many standards as you like, but you do, you've got to have that. You've got to have that and learning, taking learnings from kind of voluntary carbon. 

You know, people have got this kind of idea of a triangle set up in your mind. You've got the person setting the rules, you've got the person carrying out the activity according to the rules, and then you've got the third person or the third organisation who's coming in and checking that the act, the rules are being followed. 

And you kind of, you need to keep those, those roles separate to an extent to make sure that there are conflicts of interest being effectively avoided. So I think the standards and clarity and you know, and getting, getting best practises communicated right across the board along with minimum standards, all very useful. 

Just like a picture of everything. 

Yeah, but I think we do, 

I would say, that having regulatory oversight would be good because it provides more assurance. It needs to be flexible though, in terms of digging into the challenges. There are questions that arise about enforceability and to what extent do you hold people accountable for, and so, and what kind of administrative burden does that introduce? You know, how much are you going to pursue people to give you over information and, and pay you money to come and check their work? But could you design the system where it's minimal and it feeds into everything they're doing already? 

Yeah. 

And I think, you know, like the whole there, there's so much talk about digital data capture, satellite imagery, things like that, you know, and I think the transparency point, spatial mapping, you know, of BNG sites, whether it's on or off sites, is going to be quite key. And I think you're right. I think there's no one silver bullet, but everything has to come together. 

But there has to be purposeful and intentional. 

And it kind of feels like we're not quite well, I know we're not quite there, but someone hasn't got the reins apart. 

I mean, your road map, you set it out, but it comes back to the, who is responsible to, for what in the market setting. 

Where do you see that? 

So it's not exactly clear, I think. No, it's not at all. 

Yeah, on who is responsible for what because you have this idea of, kind of, what are the penalties for not following the rules correctly. 

But, you know, just a classic example, just habitats in general and nature, it can be very unpredictable. 

You can just have a force majeure event like a, you know, horrible storm or increased, you know, it could be a chronic climate risk of increased temperatures. 

And you know, what, how do you balance incentivising people to do the right thing and following the rules to a tee, knowing that they could actually be on the hook for something if they're not found to, if they're found to not be following the rules? 

But on the flip side of that, you, you have to also build in the classic kind of issue of nature being unpredictable and not following a balance sheet or an Excel, you know. 

Yeah, I think, I think it's an interesting one, isn't it? 

So from a nature point of view, I mean, I'm lucky we've got a brilliant climate resilience team, you know, and they they can really tap into climate future prediction data. 

You're right, there's still level of uncertainty there. 

But as a, from a technical industry side, there's a lot of learning that we need to do about that. 

But I think it's an acceptable level of that 10%. 

You know, it's, right back in the day we might have thought it was woodland, you know, but OK, this is going to be more of a woody scrubby habitat, but we still got the 10%, you know, and but I think your point comes back to monitoring enforcement. 

You know, even if those things happen, even if we've designed in climate resilience as much as possible, even if we're on track for a 10% that is very much aligned with that original biodiversity net gain target, who is monitoring and enforcing it? 

Yeah, yeah. 

And who's also looking at taking the bird's eye view of everything. 

So you've got monitors and forces, but, you know, could there, the differences in how LPAs and RBs monitor and enforce things, could that cause problems later on down the line? 

I mean, we've seen examples of international markets where potentially, you know, there's too much regional variability and it's not feeding back into one big picture. 

And we actually don't know if we are delivering 10% overall. 

Does the practical answer come back to, if we get the monitoring fees right and if we build up those resources and local planning system and that's, that, I really like that triangle that you just said. 

Is that the practical starting point? 

I think so. 

I think, I think that you can't expect people to do a great job for a quarter of what they need to do it. 

And so and, and it's really tough talking about that regional variability, different organisations will have different cost bases. 

So you might have, you know, a 75 grand monitoring fee or you might have 150 grand monitoring fee depending on who's doing it, where they're doing it and what they're monitoring. 

That's quite an extreme example actually with those figures. 

But my point is people are wondering why are things being done so differently? 

Is it going to hamstring us in the future or is it actually important to build in that variability? 

I think people are grappling with that question right now. 

Yeah. 

And I think you can have a standardised framework and market setting, but allow for those local, like you say, the local variability. 

MMM, yeah, definitely. 

OK. 

Supply side. 

What is supply side and what is one key headline from your road map that you'd like to get to? 

So supply side, basically third party land holders. 

So they could be farmers, they could be estate owners, they could be wildlife trusts. 

We've already talked about local authorities using their own land. 

Even developers actually, if they yes, if they work on sites with a lot of potential to deliver, you know, something, something minor and you know, with a minimal footprint, but they've got kind of broader habitats that they could play around with. 

They could actually become sellers. 

And again, there are some disagreements over to what extent they should be allowed to do that in the market, which was again, very interesting for me to get into, for us to get into as a as, as an organisation. Just to tap into that, was that because people worried that then the market wouldn't go to, you know, like grassroots conservation organisations? 

I think it was more worry about additionality. 

So you have for example, solar sites and you think, OK, so the developer is going to put solar panels on there, they're going to have grassland, that grassland is going to have a little bit of impact on it. 

But overall the developer would, what they would have done anyway is probably let it be and you know, not treat it with chemicals and not mow it to an inch of its life. 

So you're thinking, OK, the developer has a potential windfall here of kind of £200,000 of biodiversity revenue. 

Even if it's something that small, they could be looking at millions depending on what the habitat is. 

Is it fair that they get that? 

I mean, is that additional? 

Are we actually seeing additional biodiversity outcomes or is it something that was going to happen anyway and we're just shifting money to people who were fine to begin with, basically. Yeah, and that is, yeah, and that's where I think a road map really draws out these really important points because that's not regulation of science. 

That's what do we value and what do we think success looks like. 

Yeah. 

And I think just an overall point about markets, they can be very dangerous things in economic terms of how do you, in terms of how you align economic incentives and disincentives, where is the money flowing? 

And could it be just kind of shifting money around in a meaningless way or all towards people who maybe aren't doing as much for nature? 

That's not to say that developers don't do anything for nature, of course. 

No, there's a spectrum. And some people are, you know, there's some really great conservation projects. 

Exactly. 

Land owned by developers, yeah. 

But that point around additionality, that's everywhere in nature markets. Right. 

People are very rightly concerned about that. 

Your final pillar was demand. 

So what is that, just to clarify? 

And what was the one headline that you want to make for that one? 

So demand is, you know, primarily land developers. 

So they could be home builders. 

Home builders for some reason is held up as the archetype of the demand side for BNG. I think it's quite evocative of us as a nation with our kind of social and cultural feelings towards kind of house building. 

So you think of the house builders, but they also could, I mean, it's such a wide spectrum. 

They could be building transport links or energy infrastructure or... Anything that needs planning permission. Anything that needs planning permission through the Town and Country Planning Act. 

And you'll know more a bit about this than I do. 

But you know, and even actually, funnily enough, rural land owners themselves who, for example, a farmer wants to build a barn on their land, they need planning permission. 

All of a sudden they've got a requirement for BNG. 

Yes, of course. 

And that was something that, you know, not everyone liked, you know, this idea of kind of hammering farmers for expanding their farm business infrastructure. 

That turned a few heads. 

Yeah. 

But it's also, ultimately, yeah, that barn... Biodiversity can add value in that way. 

I know what you mean. 

So what's the headline from your road map? 

Well, actually, I think the headline from that particular pillar is we realised that it's not just about developers and, kind of, putting it down once the planning application is done and the development's built, it's actually longer term, you know how those habitats look for developments. 

And so then you're bringing in management companies and landscape architects and, you know, even down to kind of real estate agents and homeowners, homeowners who have, for example, a wildflower habitat by their houses and it's fenced off and it's protected, but there might be an ongoing service charge for that. 

And so everything that the developer does at the initial stage, they're setting up that longer term thinking, that longer term structure by which those habitats will be taken care of. 

So it was a good shift for us to think about, OK, developers need certainty upfront, but they're building that into their contracts with everyone and how they sell their developments. 

Yes, yes. 

And that's, that change of behaviour... That change of behaviour, exactly... In terms of the contracts. 

Yeah. 

So thinking about biodiversity, net gain markets as a springboard for wider green finance, what do you call, how would you describe green finance? 

Green finance, I would say is I, I take this approach of thinking about it through two ways. 

Number one is financing green. 

So how do we get money towards the people and the organisations that actually can deliver Nature Positive outcomes? 

So it's not just, you know, it's people with influence over land. 

I like that. 

Financing green. 

Yeah. 

You flip it. 

Sorry? You flip it. 

Yeah, you just flip it. 

Yeah, yeah, exactly. 

Financing green and getting as much money towards genuine outcomes as possible. 

But there's also a lens of greening finance. 

And so that takes a more systemic view of how are we going to transition to an economy that values and invests in nature? 

How are banks building in nature related risks into their balance sheets? 

How are they reserving capital to account for shocks? 

Are they following a green taxonomy? 

And that green taxonomy isn't just about climate change adaptation and mitigation, it's all about everything else that comes with the, the environment. 

So kind of making sure that you're not harming other very valuable... Right, so where investors put their money in, are they investing in, in, in what activities that enhance nature? 

Yeah, exactly. 

How do they know that? 

Well, that's the thing. 

There's lots of frameworks out there that they could assess on it. 

They could assess through that, through that question. 

But also we are developing a UK taxonomy and there is an EU taxonomy already out there. 

For green finance? Yeah, for green finance and it, you know, it was, I think we're all on a learning journey and other countries are looking at kind of, you know, let's look at the EU taxonomy. 

Let's, let's do, you know, let's do what they're doing or let's do something different. 

And let's think about international, international operability. 

So investors that are operating across multiple different countries, how do they know that if they want to really put their money towards something that at least isn't going to harm nature, how how are those different standards speaking to each other, you know? 

So you're thinking about the investors and then the money flows down in that way? 

Yeah, Yeah. 

So it's kind of bottom up and top down. Yes. 

And how economic incentives are aligned at the very top level of, you know, governments and policy and, and, you know, just, you know, thinking about, for example, subsidies - is that incentivising people to take decisions that harm nature or are we kind of putting that towards, as you say, behavioural change? 

Yeah, yeah. 

Where is this heading? 

Because it's a such a fast moving space, green finance, it's being talked about. 

You know, there's concerns that are, you know, business just going to offset and do what they do and, you know, offset stuff. 

Or is it really that turning point when investors are asking the question, which I think is probably going to be the most effective way to really transform our industry, to think, well, how do we truly build the infrastructure we need in ways that enhance nature? 

So I think that investor lens is really interesting. 

But where do you see this heading because it feels like a tipping point? 

Yeah, I agree. 

I think that business resilience is what's going to be driving conversations much more in the next few years. 

So we have typically, you know, thought of nature as a separate entity and we're kind of addressing our impacts. 

Yes. 

And you know, that could be through a CSR-driven approach or it could be kind of with compliance markets, for example, where it's just a kind of licence to operate situation. 

But really, I think businesses and the private sector in general is starting to realise just how much is on the hook for them personally, for their organisations, if they don't get on top of things like drought risk and flood risk and, you know, supply chain volatility, all driven by these massive nature shocks that could come along and really destabilise the global economy. 

And we did a piece of work earlier this year that quantified the nature related risks to the UK economy. 

And it was really, really fascinating. 

And it was, you know, the modelling done was so brilliant that I think there's value in expanding that internationally and kind of making, bringing everyone along on that journey through a risk lens. 

Yeah, but it's risk to the business, isn't it? Risk to the business, exactly. 

And I think that there's such a bridge between, so biodiversity, net gain, we were talking about this yesterday actually, it's so physical. 

You've got a woodland. Can you enhance it? You know, can you reduce your impacts on it? 

And then building created habitats. 

But it's so physical, that where you're talking is where we need to be, with what are the business risks from nature? 

How do people start answering that question? 

Well, I think there's resources out there, especially, you know, kind of assessment frameworks and disclosure frameworks like the Task Force for Nature-related Financial Disclosures. 

That takes a very specific, there's, you know, a very specific approach called the LEAP approach where you're actually looking at your location and evaluating and assessing and preparing, that's what LEAP stands for, to think, OK, really look at where your operations are based because, for example, carbon is a global polluter, it kind of floats up into the atmosphere and people think, oh, we've got to, kind of, do what we have to do to bring the overall level down. 

Let's buy offsets and let's decarbonise and do all that kind of stuff. 

But with nature, it's so location specific. 

So you really do have to take a landscape view of what the risks are and how the catchment and the wider region is varying and kind of what opportunities are out there to address that. 

And that's both within the business and with local stakeholders like land owners that could potentially, you know, provide services for addressing those risks. 

I think what we are also missing is potentially Nature Positive pathways for sectors. 

So I think, you know, you could be a business and you could go through the TNFD and assess your risks and produce a report. 

I think there are 11 reports out there in the UK right now from the early adopters. 

And we're doing an assessment on that which is going to be published, published soon. 

But we have, you know, it's really tough if you as a business have created your model and your supply chain and your infrastructure and you realise that actually you've got huge risks and huge impacts and you need to address it. 

But then you think, oh my gosh, what do I need to do? I need to do something. 

I'm not sure. 

And I think sectors working together... Yeah, definitely. 

But then we had COVID. 

The businesses are good if they want to. 

Yeah, exactly. 

And I think you're right. 

I think it's the what is nature? 

But if you just think about it from a risk lens, that's what businesses do. 

They're incredibly good at understanding their business risks. 

Yeah, exactly. 

But nature as a risk is something that we've just not developed as much of an understanding about. 

And so developing those sector specific pathways to address those is going to be quite key. 

So I think it'll work in, in terms of, you know, what's coming out in terms of companies following TNFD as well. 

That all just helps that understanding. 

Yeah, it all builds to this bigger systemic picture of how do we reduce our impacts? 

And, and I think we're always going to be, yeah, we're always going to be dependent, but how do we address our impacts and dependencies on nature? 

Is there anything important that we have not yet discussed? 

I think that, you know, it's also important for global leaders to lead by example in terms of, you have this private sector and so much firepower behind it, but you also, you know, have other policy tools like, like subsidies, like tax, you know, general things. 

And I think, I think there's a lot of pressure on the private sector to get moving, but I would also like to see countries kind of, you know, shift, shift their policy incentives accordingly. 

Yeah, governance, yeah, reporting their nature impacts. 

Exactly. Bringing in philanthropic capital as well and crowding, using combinations of blended finance. 

Because you know, if you're talking about investing in nature, that can be, you know, very tough to kind of meet that 12% return or whatever your shareholders want from you. 

So how can, how can finance work with philanthropic capital to kind of de-risk that? Going back to what we talked about, so this is the rise of nature, but I, you know, one moment I'll be really excited, but one moment I'll worry that we're not going to truly be, you know, truly make this point. 

What is your greatest fear when it comes to what feels like this tipping point? 

It feels like this is a moment now for nature. 

But if we don't get it right, what do you really worry about that? 

I worry about this idea that everyone's going to think it's someone else's problem to fix. 

You know, I think people are going to wonder why are we putting in so much effort? 

I think, I think, you know, oh, trust, trust these governments to sort it out or trust these private sector entities who have announced massive, massive targets for channelling private finance into nature. 

I think we all need to be vigilant and we all need to make sure that the direction of travel is going to be focused on actual action and not kind of... Collective action. 

Yes, collective action. 

Exactly. 

It's everyone's responsibility. 

But I don't want to see people assume that, you know, someone else is going to fix it. 

Yeah. 

And I think your work is the, especially the road map, I found it really inspiring. 

But who is your role model? 

Really tough one. 

I think I've got a mix of people really. 

But I, I, I have to say a classic one would be Jane Goodall. 

I think that's completely, you know, not related to the finance aspect as much, but she is just such an inspiration. 

You know, she started... An icon. 

She is an icon, but the more you kind of, she's a household name, the more you learn about her, the more you're impressed by her. 

And so she didn't have a formal training, scientific training. 

She just sort of, you know, she learnt on the job and she took unorthodox methods that a lot of people criticised her for, but she completely changed her understanding of how, you know, chimpanzees and people are not so different. 

And then she, and now, she is an activist, but she actually focuses so much on hope. 

And I think in this sector in particular, it's so easy to get disheartened. 

Yeah, that's true. 

But she is, you know, you read her books and you kind of watch her speak and she's getting involved in kind of policy and, and, you know, she always has that message of hope. 

Yeah. 

And I think it's really, really good to, kind of, make sure that you as an individual in this space, take a step back and, and let yourself be. 

You know what I learned from Jane Goodall? 

And I've been privileged to be at one of her lectures. 

Not everyone can communicate that level of science or what she saw, you know, and it's that kind of communication piece and the way that she really inspires, you're right, you know, just the way that she acts, but also the way that she was able to communicate and get people to, you know, really join her mission. 

Yeah, definitely. 

No, it was unbelievable. 

And last question for people who are just starting out and they're thinking, yes, you know, I want to join the mission. 

I want to work and do what I can for nature within our industry world. 

What's your advice? 

I would say there is no shortage of good to do and work to be getting on with. 

So you can almost give yourself permission to be selective and really find what drives you as an individual. 

There's, there's going to be something that you think is amazing and really kind of interests you on an intellectual level, as well as a kind of a professional level and a spiritual level. 

You know, you can speak to, there's so much stuff that, you know, I can see people being drawn to one particular issue and that is their drive. 

That is their food for the soul. 

In particular, when we get, you know, disheartened and there's a lot of bad news going around, having a cause or a concept or, you know, anything that you really back in your heart and soul to fall back on when those times are tough, that's going to be hugely important. 

So nature, I know we've gone from green finance to sustainability and then to nature, in particular, but there's, within those areas, you can, you can work on one single thing, one tiny part of it for the rest of your life. 

But if that's what drives you, then do it. 

Phoebe, thank you very much. 

Brilliant. 

Thank you.