The buzz on biodiversity

“We are on the verge of a mass extinction,” says JLL’s recent hire Amanda Skeldon. If the loss of 60% of the world’s flora and fauna over the past 50 years seems tangential to the property industry, think again. According to the World Economic Forum, around $44tn (£35tn) of economic value is moderately or highly dependent on nature, with construction being the most at-risk sector.  “Air quality, the food we eat, the raw materials, the clothes we wear, almost all human activity – including construction – are reliant on biodiverse, healthy landscapes,” says Skeldon. With legislation including biodiversity net gain about to come into force, even those who refuse to accept the science will be forced to take responsibility. And something is stirring, like the first green shoots. As well as threats, the industry is starting to see opportunities. Last week, Barratt Developments’ head of sustainability, Helen Nyul, made a speech detailing its approach to BNG. This week, CBRE publishes its “practical guide” to BNG. It points out that limiting damage to habitats designated the most ecologically valuable should be the priority for developers. This is not just because it is “the right thing to do”, or even because of the value added through enhanced wellbeing, health or placemaking. CBRE says: “It’s because it will be easier and cheaper to meet the new net gain requirement if they do.” And then three months ago JLL hired Skeldon as director for climate and nature. “I think I’m probably the only person in the sector with the word ‘nature’ in my job title,” she laughs. “That tells you something in itself.” As she puts it, Skeldon is a relative newcomer to the “wonderful world of real estate”, having spent a career in not-for-profits. But she knows a lot about BNG and is “quite nerdy when it comes to the green stuff”. JLL has brought her in because, from next year, the E of ESG will not be limited to conversations about carbon. From November, BNG will become mandatory across England and Wales. BNG aims to pull off the seemingly impossible: allowing development to take place while biodiversity is simultaneously restored.  Developers will have to prove that their schemes will not only replace any habitat lost to development, but will add 10%. If they can’t, they won’t get planning. The 10% uplift is the minimum requirement, but the government is looking at whether this can be increased to 20% in some cases. “It’s a fairly sizable legislative stick,” says Skeldon. And some people are going to get whacked. The recognition of the need to do something is not new. “People have been broadly saying ‘we need to do something about biodiversity’ for a few years now,” she says. “And then there would be this big pause, they would all nod, and then get back to something simpler, like carbon.” In fact, the government has been consulting on some form of BNG for development since 2011. That reached a peak when it became a flagship policy of Michael Gove’s Environment Bill, which received royal assent last year. Many local authorities already have the requirement written into their planning guidance, and although it is not yet mandatory at a national level, locally and regionally it is beginning to be implemented in some form. However, turning BNG ambitions into something deliverable is far from simple. The consultation on what it will look like and how it will be enforced only ended last month, and the metric for quantifying BNG is already in its third iteration.  Canary Wharf’s green spine One trailblazer is Canary Wharf Group, which wants the biodiversity uplift at its 16m sq ft Docklands estate to be a shining example to cities across the world.  It has partnered with the Eden Project to rethink Canary Wharf’s public realm and waterways and its contribution to biodiversity by creating a “green spine” running through the estate. This will comprise new parks and gardens, bridges, boardwalks and floating pontoons. Canary Wharf actually has it relatively easy. There is no record of what was on the site, in terms of biodiversity, before it was built. To comply with the law, it will simply have to add 10% to what it has already provided. “In parts of London where you are replacing a man-made environment that effectively has a biodiversity score of zero, a little improvement makes a big difference,” says Skeldon. [caption id="attachment_1132220" align="aligncenter" width="847"] Canary Wharf Group plans to create a “green spine” running through the estate © Glenn Howells Architects[/caption] For a city centre scheme, where a tired old office block is replaced by a shiny new office block, the requirement is fairly simple. Putting a wildflower mini-meadow on the roof may be all you need to do to get that 10% uplift. But, of course, nothing is ever that simple. In London, the final guidance for the GLA’s urban greening factor will be published later this year. The guidance aims to help boroughs determine the amount of “greening” that should be required in major developments, with a set of rules that should go above and beyond the baseline set down by the BNG laws. The brownfield paradox But let’s suppose Canary Wharf was being built from scratch. As a brownfield site, you would expect any green addition to give you that 110%. Not so. “Just because that site you are regenerating is brownfield doesn’t mean it isn’t biodiverse,” says Roland Bull, head of rural investment at Bidwells. Open mosaic habitat – brownfield to you and me – can be among the most biodiverse, providing habitats for a range of flora and fauna. In fact, two of the UK’s top sites for wildlife diversity are brownfield land and support some of our most scarce and threatened species. Canvey Wick in Essex is described as a “brownfield rainforest” by conservationist Chris Packham, the 93ha reserve was once a dumping ground for construction waste and the site of an oil refinery. As BNG requires habitats that are lost to be replaced “like-for-like”, you cannot just replace scrubland with a few green spaces and think you have ticked the box. In fact, it is so complex that the Royal Town Planning Institute has urged the government to exempt brownfield sites. In its response to the consultation, it said imposing BNG on vacant or derelict land “in areas of precarious development viability would be effectively shooting regeneration policy in the foot”. Charlie Dugdale, a partner in Knight Frank’s land and professional team, says: “It’s just one more issue that local planning authorities have to grapple with, and the list is getting long – climate change emergencies, water and nutrient neutrality. The result is that LPAs are freezing in the headlights, local plan processes are being put on hold and planning applications are not being granted. All of this places further stresses on a marketplace that is struggling to identify supply.” At the heart of this is the metric behind BNG. “Trying to put a number on habitats and nature that is consistent for every environment in every location is incredibly challenging,” says Skeldon. “And it’s arguable whether it is even successful. But you need something. And people need numbers.” Under the rules there is – currently – a hierarchy. First you should attempt to do no harm. After that you should replace what exists on site as closely as possible. But if you cannot do that, provision needs to be made nearby. “And if it can’t be nearby, you have to buy credits,” says Skeldon. “And pray for forgiveness after you have done it.” Even on-site provision has problems. Skeldon tells the story of “someone sticking beehives” on a new development in London. “All very good, but the problem at the moment is that everybody is sticking beehives on the roofs. What we don’t have is enough biodiversity of flowers and pollen for the bees.” Air quality, the food we eat, the raw materials, the clothes we wear, almost all human activity – including construction – are reliant on biodiverse, healthy landscapes Not to mention the fact that introducing honey bees is often detrimental to biodiversity, as they drive out other species of indigenous bee. Local nature recovery plans are joining these things up to a greater or lesser extent. Greater Manchester, for example, has a sustainable framework that attempts to pull all of this together. However, as the Local Government Association says in its response to the BNG consultation, it is all well and good asking councils to police this, but they are already overstretched and under-resourced. And there are other issues. BNG only applies to new buildings, but around 80% of the buildings we will have in 2050 already exist. The latest Deloitte Crane Survey shows that most construction in the city is for refurbs. But, so far, there are no requirements for refurbs to contribute. Buying off-site biodiversity units If biodiversity cannot be preserved or improved on site, developers will be allowed to look off site, either by creating or improving habitats away from the development, or by purchasing biodiversity units from a third party. For some, this is a much better approach. “Developers will try to eke out every bit of score by putting in as many little bits of green space as they can,” says Bidwells’ Bull. “But this isn’t providing biodiversity. Biodiversity doesn’t mean ‘green’, it means habitats. And to provide habitats, you need to think bigger. “Where policy fails is that it is trying to achieve two outcomes. First is the desire to provide accessible green space. What comes second is the actual strategic environmental outcomes. The two are not the same. In fact, they are sometimes in conflict.” As the éminence grise of off-site provision, professor David Hill, chair of the Environment Bank, says: “It must be acknowledged that what is best for people is not always best for nature.” With any on-site habitat comes the potential for human disturbance. Ecosystems can be disrupted by a child playing on a meadow, or by tidying up woodland scrub. “If a habitat is manicured or altered by the people who surround it, the nature restoration it delivers will always be limited.” Another limitation is size. “There is lots of research that on-site habitat creation is of minimal value to biodiversity because the areas are small and fragmented,” says Hill. “Large-scale restoration is the only way to solve biodiversity loss. The bigger the restoration, the more abundant the benefits.” For Hill, an ideal size for a habitat creation site is somewhere between 10 and 100ha in a rural area to minimise human disturbance. The idea has been backed by numerous academics, some of whom wrote an open letter to environment secretary George Eustice earlier this month. Bull wants to go one better. Last month he partnered with Cambridgeshire County Council, which owns the 380-acre Lower Valley Farm five miles south-east of Cambridge. [caption id="attachment_1132131" align="aligncenter" width="847"] © Glenn Howells Architects[/caption] The predominantly arable farmland site next to a site of special scientific interest has been selected to enable good habitat connectivity to its wider surroundings. The arable “desert” will be gradually turned into botanically diverse grassland, scrub, hedgerows and native woodland, as developers buy units “off the shelf”. Bull says it will act as a “national showcase” of how this can be done, and plans to start speculatively buying more farms himself. However, Skeldon sees a potential issue with this. “If you give people the opportunity to go off-site, it can become an exercise in box-ticking,” she warns. “The developer says, ‘we can do what the hell we want to this land, we just have to buy some credits and then it becomes someone else’s problem’.” Knight Frank’s Dugdale estimates that biodiversity credits could cost £20,000 to £25,000 each, and the market could be worth £135m a year for farmers and landowners alone. Bull, too, has seen examples of a “rise in agricultural land values, due to housebuilders habitat banking”. But, he adds, often they are buying “the wrong sort of land in the wrong places”. The cost of these options could be very different. Defra estimates an average cost of £19,700 per hectare of habitat created on site. But CBRE’s research shows that off-site compensation has the potential to cost up to £231,000 per hectare – 12 times as much. This is due to the relatively high estimated cost of purchasing individual biodiversity units and the proposed cap on the number of units that can be created per hectare. Net gain through the purchase of government credits has the potential to be more expensive still, as the government has stated its intention to set prices higher than the market price. See the carrot, not the stick Ultimately, the industry needs to stop thinking about the cost, Skeldon says. “You have to see this as an opportunity. We could use it to reduce local flood risk, improve air quality. We could enhance amenity, improve health and wellbeing, whether that’s employees or occupiers.” There is growing evidence that green roofs and walls vastly improve insulation. “If we are moving to a world that is no longer gas-powered and it’s all heat pumps, insulation is going to be really key,” says Skeldon. “The actual benefits of that, the enhanced rent or enhanced property value, the industry isn’t thinking like that yet. It is not seeing this as an opportunity, it is still seeing BNG as the stick behind us, not the carrot ahead.” Despite the fact it will be law in a matter of months, BNG is “a very blunt tool”, Skeldon says. “It doesn’t go far enough – ideally we need to go beyond even environmental net gain – but it is really hard to get a metric that will.” She believes it will have to be the industry that refines and perfects this tool. “It’s not perfect, but we can’t wait until it is perfect,” Skeldon adds. “It is a step in the right direction, and we need to be moving in that direction right now.” To send feedback, e-mail piers.wehner@eg.co.uk or tweet @PiersWehner or @EGPropertyNews   Main image © Shutterstock