Natural capital matters: stacking and bundling

With new streams of funding and income available for regulating services with new statutory obligations coming into force, here is an area worthy of some consideration.

There’s much more in the recording of the webinar than this short note can do justice to. As a taster, here’s some of what you’ll hear about.

Stacking – the provision of multiple ecosystem services on the same land, sold to different buyers under different contract arrangements. For instance, biodiversity units for biodiversity net gain measures sold to one buyer, in relation to a habitat bank site, alongside the sale to another buyer of carbon credits from the woodland on that same land.

Bundling – the bringing together of multiple ecosystem services in a single landholding. The example given for this is selling carbon credits alongside taking payments for environmental enhancements that allow an organisation to accrue and report ESG commitments.

DEFRA’s recent guidance Combining environmental payments: biodiversity net gain (BNG) and nutrient mitigation - GOV.UK (www.gov.uk) has confirmed that biodiversity net gain units and nutrient neutrality credits can be stacked, combining payments; and also it may be possible to achieve stacking on land used for carbon credits or agri-environmental schemes provided that additional habitat enhancement has been achieved and can be defined. More detail is needed.

You will find the visual illustrations of some possible scenarios, which were put up on screen, easy to follow and memorable, particularly for anyone new to this area.

Kate rounded off her presentation with a summary of some challenges and risks, touching on governance, verification and audit, timescales (the challenge of different statutory requirements of biodiversity net gain units, nutrient neutrality credits and carbon credits), maintenance, and contract terms.

The webinar concluded with Mills & Reeve’s Andrea Newman posing a number of interesting questions which drew out lots more information and insightful comment from Kate Russell. You can watch a recording on natural capital matters here.