7 October 2024
Sophie Hazza, Global Nature Service Lead, Claire Zhang, Senior Sustainability & Energy Analyst, and Erik Aberg, Senior Sustainability & Energy Analyst
“Biodiversity loss poses a significant risk to global economic stability, with over 50% of worldwide Global Domestic Product (GDP) highly or moderately dependent on natural ecosystems.” — World Economic Forum
“The built environment is intrinsically linked to drivers of biodiversity loss, relying on them for its function while simultaneously impacting them.” — Green Building Council Australia
Under the UK’s Environment Act 2021, the Biodiversity Net Gain (BNG) legislation mandates that all new developments must achieve at least a 10% net gain in biodiversity. This presents both significant challenges and critical legal obligations for developers and stakeholders. In this article, we explore key strategies for ensuring compliance and guide developers on how to effectively navigate the complexities of the BNG framework, ensuring both ecological enhancement and regulatory success.
What is the Law?
The Biodiversity Net Gain (BNG) legislation, introduced as part of the UK Environment Act 2021, mandates that all new developments and significant refurbishments must result in a measurable net increase in biodiversity. Specifically, developers are required to demonstrate a minimum of 10% net gain in biodiversity value compared to the pre-development baseline. This has applied to planning applications made in England since 12th February 2024 for large sites – defined as residential developments with 10 or more dwellings, or where the site area is greater than 0.5 hectares. For sites smaller than this, the rule was enforced on 2nd April 2024.
Under the law, developers must assess the current biodiversity of the site using a standardised metric and create a plan to enhance biodiversity. These enhancements may involve on-site measures such as habitat creation or improvement, or, if necessary, off-site compensation strategies that contribute to biodiversity in another location.
Long-Term Requirement: Importantly, developers must commit to monitoring and maintaining biodiversity gains for a minimum of 30 years post-development. This ensures that biodiversity improvements are not just short-term fixes but have a lasting impact on local ecosystems.
Who Are Responsible to Act?
The BNG legislation affects several stakeholders in the property and development sectors:
- Developers: Property developers must incorporate biodiversity considerations into every stage of a new build or refurbishment project. Local planning authorities will not approve planning applications if BNG is not demonstrated. Failure to comply with BNG requirements could result in delays to planning permissions or fines.
- Property Investors: Investors in new or refurbished properties must ensure that projects comply with BNG standards, as this could affect asset valuation and long-term investment returns.
- Local Planning Authorities: These bodies are responsible for enforcing the law and ensuring that developments include sufficient biodiversity measures. They have been given increased government funding to help them process these new applications.
- Ecologists and Sustainability Consultants: Professionals in ecology and sustainability play a key role in guiding developers through compliance, including assessing biodiversity and creating mitigation strategies.
How Should Stakeholders Prepare?
Preparation for the BNG legislation involves several steps:
- Early Engagement: Developers and stakeholders should engage ecologists and sustainability consultants early in the planning stages to conduct biodiversity assessments and identify any ecological risks or opportunities.
- Understand the Biodiversity Metric: All parties must familiarise themselves with the “Biodiversity Metric 4.0,” the tool developed by the Department of Environment, Food, & Rural Areas (Defra), which is used to calculate the biodiversity baseline and net gain targets. This metric helps measure biodiversity value by considering habitat quality, distinctiveness, and condition.
- Incorporate Biodiversity in Design: Incorporating biodiversity measures such as green roofs, wildlife corridors, or tree planting in the design phase can help meet the BNG requirements while enhancing the sustainability and appeal of the project.
- Budget for Biodiversity Enhancements: Developers should allocate adequate budget for biodiversity assessments, on-site or off-site enhancements, and ongoing maintenance of biodiversity measures.
- Global Reach: The UK’s BNG approach is also setting a benchmark for other governments to introduce similar regulations, aimed at strengthening biodiversity protection on a global scale.
What Are the Three Main Approaches for Achieving Biodiversity Net Gain?
- On-site gains: Enhancing or restoring biodiversity within the development area.
- Off-site measures: Making biodiversity improvements at an external location.
- Purchasing statutory biodiversity credits: A last-resort option when on-site and off-site measures are not feasible.
To meet the 10% BNG requirement, developers use the Biodiversity Metric Tool, which calculates biodiversity units for area habitats, hedgerows, and watercourses. These biodiversity units are based on several key factors:
- Habitat size
- Distinctiveness
- Condition
- Strategic significance
- Risk multipliers, which account for the difficulty of creating or enhancing a habitat and the time it takes for the habitat to reach its target condition.
What Are the Steps To Achieving On-Site Biodiversity Net Gain?
The Unseen Impact: Upstream Effects of Construction Materials on Biodiversity
Under the current Biodiversity Net Gain (BNG) framework, one of the notable gaps is the lack of consideration for the upstream impacts of materials used in construction. While the legislation focuses on enhancing biodiversity on-site or through off-site compensation, it does not account for the environmental footprint of sourcing, manufacturing, and transporting construction materials. The extraction of raw materials, deforestation, and other habitat disruptions caused by supply chains can significantly harm biodiversity but remain outside the scope of the BNG mandate. As developers strive to meet the 10% biodiversity net gain requirement, addressing these upstream impacts through sustainable procurement practices is equally vital for achieving true ecological balance.
Navigating the BNG legislation requires thorough planning and the right expertise. The Biodiversity Metric Tool operates under several rules, ensuring that habitats of similar type and distinctiveness are used to offset any losses i.e. on a ‘like for like basis’, and that gains for each habitat type are calculated independently. These metrics are further adjusted using risk multipliers to account for challenges in habitat creation, the time required for ecological maturity, and the geographical distance between the development and compensatory biodiversity sites. The tool requires a competent person, trained in British Standards (BS 8683:2021), with professional ecological judgment and project-specific knowledge, to conduct the assessment.
How Biodiversity Net Gain (BNG) Aligns with Corporate Reporting:
EU Taxonomy
The EU Taxonomy aims to redirect capital toward what it classifies as “environmentally sustainable” activities. BNG aligns with this by prompting developments to incorporate Nature Based Solutions (NbS) on site, which has additional benefits including Disaster Risk Reduction (DRR). Companies integrating BNG can demonstrate compliance with the Taxonomy’s requirement on climate adaptation strategies, whilst showcasing contributions to sustainable land use and ecosystem preservation.
Sustainable Finance Disclosure Regulations (SFDR)
Under the SFDR, financial products must disclose sustainability impacts. BNG helps funds, particularly those under Article 8 and Article 9, meet environmental objectives. For example, if a fund aims for a 15% biodiversity improvement across its assets, BNG offers a clear path for tracking and reporting this progress, supporting sustainable finance goals and attracting ESG-focused investors.
Corporate Sustainability Reporting Directive (CSRD)
The CSRD mandates comprehensive reporting on environmental impacts, including biodiversity, through the European Sustainability Reporting Standards (ESRS). Specifically, ESRS E4 focuses on biodiversity and ecosystems, requiring companies to disclose their impacts, dependencies, and mitigation measures for biodiversity loss. BNG provides a measurable framework to address ESRS E4 by enabling companies to report positive biodiversity outcomes.
How We Can Help
At Longevity Partners, our team of experts in Nature-based Solutions (NbS) and ecology has successfully delivered projects ranging from corporate nature strategies to detailed asset-level feasibility studies. We offer vital support to property investment companies and developers, guiding you through the complexities of the evolving Biodiversity Net Gain (BNG) legislation and nature-related requirements. Our following services ensure that your assets will not only meet regulatory standards but also enhance long-term environmental value and resilience:
- Biodiversity & Ecology Site Assessment and Enhancement Plan: Longevity will partner with ecologists local to your assets to conduct thorough site assessments to establish the biodiversity baseline and identify opportunities for enhancement. These assessments will ensure that your assets meet or exceed the 10% Biodiversity Net Gain target.
- Nature-based Solutions (NbS) Technical Design Guide: Offers support on green infrastructure and biodiversity enhancement measures, provides bespoke recommendations for your asset, compliant with EU Taxonomy regulations on adaptation to climate using Nature Based Solutions. Can be as a result of a Climate Risk Assessment and/or feasibility study.
- Mitigation and Compensation Strategies: If on-site biodiversity enhancements are not feasible, our consultants can help design off-site compensation strategies, ensuring that developers still meet legal requirements and contribute to regional biodiversity goals.
- TNFD-aligned Corporate Nature Strategies: Bespoke strategy creation to align with industry best practices and legislative relating to nature and biodiversity, including BNG. Objectives and KPIs are location specific, and linked to global frameworks (TNFD, GBF) – this analysis includes a high-level Nature Risk Assessment to understand local risks.
- Biodiversity and Nature Policy Creation: We develop internal policies alongside key stakeholders in the business on Biodiversity, Deforestation, Sustainable Procurement, etc. Longevity team researches and integrates industry best practices (TNFD, SBTN, Nature Positive Alliance), legislative requirements and competitor standards, consolidating them with Client’s wider sustainability agenda.
- Embodied Ecological Assessments: Evaluation of biodiversity and nature-related impacts using tools such as One Click LCA’s Biodiversity Supply Chain Stress Tool. This assessment analyses materials, transportation, and construction activities across life-cycle stages, identifying biodiversity stress hotspots to help clients quantify their ecological footprint and align with frameworks like TNFD.
To learn more and ensure your projects meet BNG compliance, please contact our Global Nature-Based Solutions Lead, Sophie Hazza sh@longevity.co.uk