Insights

Awareness of the biodiversity emergency.

You can read part 2 of this insight series here.

Value is widely considered to be the worth or usefulness of a thing. In everyday life, both consciously and subconsciously, we use and interact with nature and so benefit from its value. To most people, the value of nature is felt, seen and experienced but rarely quantified.

Biologists and ecologists describe nature’s ‘usefulness’ as ecosystem services and typically group them into four classifications:

• Provisioning services – food, fuels, building materials
• Regulatory services – cleaning air, filtering water, decomposing waste, preventing soil erosion
• Cultural services – culture, intellect, social development
• Supporting services – carbon sequestration, nutrient cycling

Calculating nature’s value in monetary or non-monetary terms is a significant challenge due to nature being unpredictable and changeable according to external factors (light, temperature, precipitation). Its benefits to people and society are vast and without it we simply wouldn’t exist. The complexity in determining its value has ironically led to its devaluation by businesses, governments, and people. A much simpler equation has been the price that timber can be sold for by cutting down a forest or the value of land cleared for development. This has ultimately led to species and habitats entering a freefall and the start of the Earth’s sixth mass extinction event, commonly being referred to as a biodiversity emergency.

Awareness of the biodiversity emergency has been spread by the likes of popular TV broadcasters showcasing its devastating impacts. This has, in turn, ignited a societal pressure on businesses and governments to protect and restore nature. Consequently, the UK Government is introducing new environmental policies to curry favour with voters. For the built environment sector, they have taken the form of a regulatory requirement for developments to create 10% more biodiversity compared to a predevelopment level. This new policy will create the space for a new market to emerge whereby biodiversity units can be created by landowners and sold to developers. It’s been forecasted that initially, this will generate a market value somewhere between £135 – £274 million and a market set price of £20,000 per biodiversity unit. While this may not be the ultimate saving grace for nature, it is driving the right conversations around reassessing its value.

The emergence of the Taskforce for Nature-related Financial Disclosures (TNFD) will enable companies and financial institutions to integrate nature into decision making and risk analysis. For investors, nature presents a material vulnerability to ensuring long-term returns. An absence of assessing nature-related risk could lead to devaluations, stranded assets, supply chain instability, and lost reputation.

To stay competitive, developers have an opportunity to utilise nature’s inherent value so that the investments they make in creating a biodiversity net gain generate both monetary and non-monetary value. To enable our clients to value nature, we have created Biome which uses an evidence base composed of a meta-study of scientific papers as well as the findings from engagement with industry thought leaders and academics. This evidence base has been used to build value profiles for different nature-based solution types. These profiles then enable landscape strategies to be appraised by considering how they contribute to the attainment of a development’s sustainability targets, business priorities and the wider value being created. The key outcome is an ability to rapidly optioneer, influence and support decisions around landscaping design based on the desired attributes being sought.

It is unlikely nature’s total value will ever be quantified but we have enough of an understanding to stop nature from falling off the balance sheet.