How can Biodiversity Net Gain positively change real estate?

The UK’s natural world is in crisis. The State of Nature 2023 report highlights a range of concerning statistics including 38% of observed terrestrial and freshwater animal species declining in abundance, and 54% of flowering plant species declining in distribution.

While certain designated areas across UK nations are protected, the construction of new housing, commercial and infrastructure projects continue to result in substantial damage to unprotected habitats.

“There is growing recognition of the importance of nature to a sustainable future, but a considerable gap in action to address a clear nature crisis” says Danelle Veldsman, JLL’s Nature Strategy Lead in the UK.

With urgent action needed to restore biodiversity and support local habitats, Biodiversity Net Gain (BNG) has been introduced as part of the government’s strategy to reverse the negative impact of development and ensure that natural environments are in a measurably better state post-construction.

From February 2024, the majority of new developments in England and Wales must deliver a minimum net biodiversity increase of 10%, and this improvement must be sustained for at least 30 years. From April 2024, this requirement will extend to small sites. However, local authorities that want to go further can mandate a target of more than 10%.

At present, three councils in the UK – Guildford, Brighton and Hove, and Worthing – have taken proactive measures by incorporating over 10% BNG requirement in their local plans, demonstrating their commitment to go above and beyond the minimum standards.

Developers and landowners involved in the planning process must now carefully consider how their projects will impact onsite biodiversity.

“Developers understand that they won't have a business model if they don't think about biodiversity” says Veldsman. “This legislation really does bring nature and biodiversity to the forefront of real estate, making it a key part of development planning. In fact, it’s now an important factor in development feasibility.”

Assessing BNG presents a complex challenge, but Natural England’s Biodiversity Metric tool has been developed to assist in this process, enabling measurement to change in habitat quality before and after development.

Habitat serves as a proxy for biodiversity with three main factors influencing this: habitat size and condition, its distinctiveness, and its strategic significance. By considering these factors, ecologists can gauge the overall impact of development on biodiversity within a given area.

For developers and landowners, using the Biodiversity Metric can help them to understand the ecological value of their projects and identify opportunities to enhance biodiversity within and around their sites. For example, creating hedgerows in housing developments can improve habitat connectivity and support the movement of wildlife, such as hedgehogs.

By applying BNG, real estate developers can create thriving natural landscapes. This can be achieved through various measures, such as incorporating onsite habitats like rooftop gardens and green walls, undertaking offsite restoration projects, or offsetting through biodiversity credits. However, by proactively embracing BNG, greater value can be delivered.

“At JLL, we believe in taking a holistic approach to the environment, looking beyond individual aspects and embracing the opportunities that come with Biodiversity Net Gain,” says Amanda Skeldon, JLL UK’s Climate and Nature Director. “By creatively delivering on this concept, we can unlock a whole range of social, environmental, and economic benefits.”

From a social perspective, developers can leverage BNG to establish accessible green spaces, including parks, that enrich both biodiversity and quality of life for local communities. Numerous studies have shown that spending time in green spaces can reduce anxiety, stress, and depression among individuals.

Furthermore, incorporating rain gardens as a means to manage surface water flooding contributes to the safety and resilience of communities, particularly in light of increasing occurrences of extreme weather events. These rain gardens, adorned with a variety of wildflowers and grasses, also enhance the appeal of housing developments by attracting wildlife such as birds, butterflies, and pollinators.

BNG also offers economic advantages for developers and building owners.

“Incorporating BNG measures can enhance the value and marketability of a development, creating green neighbourhoods which attract potential buyers and tenants who are increasingly favouring sustainable spaces” Veldsman explains. “A consistent, leading approach to sustainable design and incorporating nature can also enhance the corporate brand and reputation of developers.”

Developers should therefore seek to go beyond mere compliance with BNG. “We encourage our clients to seize the opportunity and go beyond the minimum requirements”, says Skeldon. “Rather than asking what's the easiest way to comply, let's explore the additional benefits we can create.”

While there continue to be early challenges in the practical implementation of BNG such as defining specific requirements, establishing monitoring processes, and ensuring long-term maintenance, Skeldon believes that the short-term hurdles should not overshadow the long-term opportunity to create sustainable and appealing developments that have a positive impact on the natural environment and local communities.

“By embracing the concept of BNG, developers can create sustainable and vibrant green spaces that add value to communities and enhance market appeal. These spaces offer more than just enhanced biodiversity; they offer an opportunity to create resilient and attractive environments where people can thrive.”