Biodiversity: opportunity or risk?

Why biodiversity should be top of your agenda

Biodiversity has decreased at such a rate that our ecosystems are struggling to maintain equilibrium. The equation is simple: the more diverse an ecosystem, the greater service it plays for the planet. So, our job now is to create opportunities for nature to recover.

The decline of biodiversity

This marked reduction in biodiversity is impacting us on a political, social, economic and physical level, presenting multifaceted challenges.

The UK State of Nature Report 2023 states that the average decline in biodiversity since 1970 is 19%. While the figures below show a concerning picture, there were some positives in the report, such as the recovery of certain bat and freshwater insect populations.

Alongside other major influences, such as pollution, overexploitation and invasive species, there are two key drivers responsible for this rapid decline:

Land use change

Whilst planning policies provide a catalyst to mandate mitigation, accommodating and feeding the growing UK population (expected to reach 78 million by 2050) will necessitate habitat loss. Over the years, actions to drive agricultural production, such as the intensification of farming methods, growing pesticide and fertiliser use, and the removal of hedges to increase field size, have also contributed to a changed landscape with less biodiversity.

Currently under development, the Land Use Framework in England aims to balance the numerous competing demands on land. With both economic growth and improving England’s biodiversity key aspirations. Secretary of State Steve Reed described the framework as “our chance to reimagine England for the future and to deliver”.

Climate change

A 1.5°C warming limit was agreed in the Paris Agreement in December 2015. This was set to limit the global temperature rise above pre-industrial levels in order to minimise the damaging impacts of climate change and to preserve biodiversity. 2024 was the first year that the warming limit was exceeded. By current estimates, Edinburgh will have the same climate as Paris, and London the weather of Barcelona by 2050.

TOP THREE TAKEAWAYS

1. Biodiversity is the variety of life. When species and habitats interact, they form ecosystem services which are valuable to society.
2. A biodiversity baseline and strategy enable land managers to capture and understand environmental data and demonstrate stewardship, potentially unlocking access to public and private finance.
3. Defining a biodiversity vision allows you to look beyond the regulatory position of compliance and create opportunities for growth.

The financial impact of biodiversity loss

According to a 2023 study by PwC, 55% of global GDP, equivalent to £43 trillion, is dependent on nature. Despite this, current levels of global funding to support biodiversity are falling short by around £525 billion per year.

The first global strategy to finance biodiversity was adopted at the COP16 negotiations in Rome earlier this year, marking a significant step toward closing this gap. This agreement, reached under the Convention on Biological Diversity (CBD), sets a framework for mobilising financial resources to implement the Global Biodiversity Framework (GBF) by scaling up investments, reforming subsidies and strengthening financial mechanisms. The agreement carries significant implications for financial institutions, reinforcing expectations for the financial sector to align investments with biodiversity goals and integrate biodiversity risks into decision-making.

In response to the GBF, the UK Biodiversity Framework (UKBF) has been set up to support the different ambitions and objectives of the four devolved countries. It aims to coordinate efforts to protect and improve biodiversity, drawing on the UK’s National Biodiversity Strategy and Action Plan.

Case Study: THE CROWN ESTATE NATURE RECOVERY INITIATIVES

The Crown Estate is progressing with a number of initiatives to work closely with its tenant farmers to balance food production with nature recovery.

Rural Environment Fund

The Crown Estate has a £20 million fund to support tenant farmers' transition to sustainable farming practices that enhance nature recovery, restore or create Habitats of Principal Importance and plant 1,000km of hedgerows by 2035 and increase woodland cover from 7% to 16.5%.

Farm Green Book

This sets out shared nature aspirations for each farm, helping tenant farmers understand how to incorporate nature recovery into their farming practices.

Environmental Farm Business Tenancies (eFBT)

The Crown Estate has worked closely with the Tenant Farmers Association (TFA) to develop a more flexible agreement which supports farmers to adopt regenerative farming practices, drive nature recovery and diversify land use and income streams. Each eFBT will have a 15-year term, with only necessary break options and will help The Crown Estate to meet its target of repurposing 15% of farmland (where appropriate) in new tenancies to nature recovery by 2030.

The Crown Estate is aiming to be an exemplar of productive and sustainable agricultural best practice, and the new tenancy models will enable this on a large scale.

An opportunity or a risk?

Is the challenge of biodiversity, the abatement of its loss and the procurement of its gain, an opportunity or a risk to rural businesses? Nature provides essential services for businesses, and the degradation of natural resources poses significant risks. Many businesses are considering their dependence and impact on nature, coming to understand that their long-term security and growth depends on the condition of the natural systems in which they operate. Put simply, a business’s impact on the environment can determine the environment’s impact on that business and governments and the private sector are increasingly recognising the importance of nature and biodiversity in our economy. The privilege of managing rural land is the ability to choose whether you want to view biodiversity as an opportunity or a risk. This is something completely unique to the rural land asset class and should be perceived as a benefit.

SAVILLS INSIGHT

Why measure biodiversity?

“Baselining and monitoring biodiversity enables you to demonstrate the impact of land management changes. By establishing a baseline, you understand the biodiversity on your land and create a framework for ongoing monitoring of biodiversity, allowing progress to be tracked and stewardship to be demonstrated. Landowners are able to fully see the opportunities and how they can engage with them. For example, they may provide off-site biodiversity enhancement to comply with a biodiversity net gain requirement.”

Lucy Jenner, Savills Head of Natural Capital Consultancy

_{Read the articles within Spotlight: Biodiversity below.}