The Woodland Trust CAP0053
Environmental Audit Committee (EAC) inquiry into the role of natural capital in the green economy: supplementary evidence from the Woodland Trust
About us
The Woodland Trust is the largest woodland conservation charity in the UK, with over 1,200 sites in its care covering over 29,000 hectares. Access to its woods is free. The Woodland Trust has over 500,000 supporters. The Trust wants to see a UK rich in native woods and trees for nature and people. It has three key aims: i) protect ancient woodland which is rare, unique and irreplaceable; ii) restore damaged ancient woodland, bringing precious pieces of our natural history back to life; iii) plant native trees and woods with the aim of creating resilient landscapes for people and wildlife.
Introduction
We welcome the opportunity to provide supplementary evidence to the EAC on the role of natural capital in the green economy, reflecting our views both as a conservation charity working with corporate partners, and as a key delivery partner for natural capital initiatives on our estates.
If you have any questions or require any further information, please contact Dr James Cooper, Head of External Affairs at the Woodland Trust.
1.1 A small number of standardised measures have been developed to accompany different ecosystem services and natural capital since the establishment of the UN Millenium Ecosystem Assessment in 2005, where many of these ideas first gained prominence. The UK Woodland Carbon Code is one such measure, but as with other examples, progress has been slow. The Woodland Trust was influential in developing the Government-led Carbon Code and also has its own Carbon offer which has provided significant learning.
1.2 We have also welcomed the work by Defra on the UK Nature Fund and the Natural Environment Investment Readiness Fund (NEIRF) as well as work by the British Standards Institution (BSI) on nature markets. It is important that measurement of environmental outcomes is:
1.3 It is also important to note that as more standardised measures are brought in, there will be additional bureaucracy and legal burden. Stacking these different measures also becomes more and more complex, and eventually sometimes impossible, when additionality becomes a barrier. An important point of taking a natural capital approach is to be holistic across a bundle of services to generate cash to pay for delivery and maintenance of the services and provide appropriate levels of profit.
1.4 The Woodland Trust is exploring how Biodiversity Net Gain (BNG), the Woodland Water Code and carbon storage in existing woodland and soils as well as elements of social capital such as recreation, connection and equity could work to put the economics in place for our ambitions both inside and outside of our estate.
1.5 Businesses need clear metrics to track the impact of their investment against. The sector does not readily have these so is often reliant on the story of a project to gain support – this only really appeals to very large businesses with bigger pockets who can carry more risk.
2. Leveraging private investment
2.1 Private income has and does make a significant contribution to nature recovery. A notable example of this is the Wyre catchment project, a Defra pilot that is now in the process of being scaled up. The project has developed a financial instrument that allows upfront investment from the private sector to be reimbursed by the beneficiaries of a healthier environment.
2.2 The definition of investment and the generation of a quotable monetary value is more problematic, given any attempt to measure the natural world in monetary value can also demonstrate our increasing disconnection to nature. There are alternative ways of measuring the natural world’s value through social capital that should also be considered (as outlined above).
2.3 The Government already has a variety of tools to encourage private investment such as tax levels and tax relief, but it is also vital that alongside targets on private investment, the Government needs to sustain and increase focus on achieving its own targets on nature recovery, which have yet to be met. This in some parts will be achieved through addressing market failures that are driving environmental decline but should also be through supporting environmental priorities and interventions advocated by its own commissioned experts such as those from Natural England and the Climate Change Committee.
2.4 Significant investment in capacity building the nature sector is also needed quickly, to enable delivery of activity that meets priority needs and can be scaled to work the pace we need and alongside potential private investment. Government could also help more to facilitate understanding within the private investment sphere of what is needed for nature.
3. Barriers to businesses
3.1 Large corporates investing in nature is not new – the Woodland Trust has been working with Sainsbury’s for 20 years – but interest has grown significantly in the last decade. The majority of corporates are now considering financing nature and climate to address risks to their business, this is largely due to compliance and reputational risk now, however, some businesses are looking at scenarios that consider existential risk such as disruptive supply chains. Top FTSE companies are pushing for legislation to enable a level playing field to address risks while not impacting competitiveness.
3.2 Businesses are seeking value for money in their investment and are facing challenges with addressing multiple crises and multiple pillars of sustainability strategies – private investment in nature cannot be siloed if we are expecting large sums. In conversations with businesses, it is clear many are looking for large scale multi-dimensional projects that deliver multiple outcomes but that can be communicated as one tangible story – a huge challenge to meet.
3.3 SMEs are different and need more transactional offers to be compliant or manage reputational risk, but they often do not have the resources to engage in anything other than ready packaged options. The individual transactions are low value, but the volume of SMEs is great.
3.4 Businesses want to invest in the UK, but current carbon markets seem to disincentivise this with many businesses opting to mitigate their emissions abroad as it is cheaper. Claims of greenwashing may dissuade some over time and the work on the global Voluntary Carbon Markets integrity as well as British standards may help address this, but it is happening slowly, and progress is stalling due to lack of uncertainty on future expectations of claims. We are however, seeing some businesses decide to direct investment at reductions in lieu of investment in carbon market mitigation, which we believe is positive.
3.5 Our contacts reference being bewildered by consultants and emerging startups – part of the infrastructure we require to enable greater engagement from businesses is a clear and honest taxonomy.
January 2024