Q&A: BNG Requirement Comes Into Force

 

With the Biodiversity Net Gain requirement having come into force on the 12th February 2024, Professor David Hill recently talked through his thoughts on the new legislation.

As a renowned expert in the field, having served as the past president of the Chartered Institute of Ecology and Environmental Management, founding member and former Deputy Chair of Natural England, and Chair of Environment Bank, David pioneered the concept of BNG and campaigned tirelessly to see it become a reality.

Here’s what he had to say on the legislation finally coming to fruition.

What is Biodiversity Net Gain (BNG)?

Biodiversity Net Gain mandates that all significant development must deliver a minimum 10% increase in biodiversity as a result of the development project being permitted. A transition period to enable developers and planning authorities to accommodate the new law came to an end in January 2024 and from now on, almost all development must comply with the regime.

This progressive and transformative law will generate much needed investment into the natural environment, restoring nature at scale and building resilience against the effects of climate change.

How did the idea of BNG develop for you?

Having spent 15 years designing mitigation schemes to enable developments to be permitted, I came to realise that the development sector would never commit to effective nature conservation within the development site boundary.

Off-site compensation was not considered either, since there was no effective regulatory requirement. Local planning authorities (LPAs), which oversee and assess planning applications and grant planning permission‌ generally treated biodiversity as a minor issue subservient to what they considered more important criteria.

I therefore decided to disrupt the model and suggested in 2004 that all development should be required to create gains for nature, which was an idea like mitigation banking used in the United States. I promoted the concept of biodiversity offsetting or Biodiversity Net Gain (BNG), founding Environment Bank in 2006.

My work in establishing Environment Bank showed me that developers needed a regulatory framework to mandate BNG, and that required a massive amount of consultation, lobbying, and indeed, heartache.

Over the course of the next 14 years. I consulted and lobbied numerous government officials in the Department for Environment Food and Rural Affairs (Defra), Natural England, The Government, The Joint Nature Conservation Committee (JNCC), Department for Levelling Up, Housing & Communities (DCLG), and HM Treasury, plus about 50 Ministers of State and five Secretaries of State.

How did you work to embed that policy into law?

I had many meetings with members of Government and professional bodies as mentioned above, as well as the environmental non-governmental organisations or ENGO sector.

The professional institutes started to take interest in my work, running numerous workshops in which I spoke, while I managed to set up a small number of volunteer offset sites.

In 2011, the government established the Ecosystem Markets Task Force, of which I was a member, and its final report in 2013 listed biodiversity offsetting as the number one priority for getting private finance into the natural environment.

Defra and Natural England pushed forward, designing a metric for the measurement of biodiversity on both development sites and BNG sites. With the backing of HM Treasury, the idea gained traction.

The hallelujah moment eventually came in 2019 when the then Chancellor of the Exchequer announced in the Queen’s speech that after so many years of lobbying, BNG was to be implemented into law through the enactment of the Environment Bill which passed in November 2021.

What is the difference between on-site and off-site provision?

It is fair to say that on-site provision is fraught with problems. Areas retained, created or enhanced are usually small fragments which are heavily disturbed by people especially with residential development.

They will almost always be passed to residents' associations or management companies to undertake the annual management and will remain unmonitored because of costs. Plus, because biodiversity can be seen as untidy, gains for nature will not be substantial as wild grasses, hedgerows and plants will not be encouraged to grow freely.

However, off-site delivery can produce real and lasting gains for nature. Large-scale Habitat Banks, of 40 hectares or more are devoted to nature restoration through active habitat creation and long-term management.

What is the role of Environment Bank in servicing the demand for BNG units?

With the clarity and certainty afforded by the regulatory mandated BNG regime, we’ve managed to raise an initial private equity fund of £240 million in order to create large-scale Habitat Banks.

Environment bankers, alliance teams, ecologists and land advisors work with landowners, farmers and other landholders to bring forward strategically located land over which Environment Bank takes a leasehold interest.

We undertake a detailed analysis of the demand for BNG credits based on the amount of land allocated for development in each of the LPAs in England.

Most development activity will be targeted to these allocations reported in the LPA’s published local plans. We therefore target the creation of our Habitat Banks in accordance with this demand analysis.

What is the process of Habitat Bank creation with Environment Bank?

In association with the landholder, Environment Bank produces a detailed habitat management agreement and plan, and then funds the creation of woodlands, wood meadows, woodland, scrub, and grassland mosaics, species rich grasslands and wetlands, and then pays the landholder annual competitive management fee, besides the rental to ensure the site is managed for 30 years.

There is no risk to the landowner if the Habitat Bank shows signs of failing, and we fund all the monitoring and reporting requirements.

What does Environment Bank’s work mean for developers?

We have a stack of Units available to be purchased by developers in order to enable them to be compliant with the new law. We validate the developers’ requirements by assessing their consultants’ reports, alongside liaising with the relevant LPA to ensure developers properly assess their need, and that we can supply their requirements. We also facilitate all the transactions throughout legal documents.

What is your standout takeaway from the BNG requirement coming into force?

Mandatory BNG is probably the single most significant conservation policy initiative of the past 40 years. It is giving clarity and certainty to the development sector, thereby enabling the development to proceed efficiently.

It will also generate much needed finance into the natural environment to tackle the substantial impacts of biodiversity loss, making our land more resilient to the effects of climate change.

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