The proposals to bring blended finance mechanisms into environmental land use add a layer of complexity to the opportunity and could become a barrier to accessibility for many. Any land use change must stack up financially.
I champion the narrative that natural capital assets within landowner holdings have immense value, but many seem unsure about how they can access this value. At the beginning of the pandemic, four independent forestry company directors prioritised the need to find a mechanism for bringing corporate finance in line with government grants and landowner engagement.
The vehicle to bring these themes together is the not-for-profit Forest Canopy Foundation (FCF). The first step was to engage with Grown in Britain with the clear purpose of offering a metric that could measure benefits in natural capital silos in the creation of new lowland woodland. This collection of benefits is called ‘canopy’ woodland
In a nutshell
FCF is a cooperation of 15 independent forestry companies, certified as expert providers and offering excellence in the delivery of woodland creation in the UK, from planting through to full establishment. Grown in Britain is an independent verifier that audits the expert providers, the scheme and the ongoing delivery.
The Forestry Commission has developed the English Woodland Creation Offer (EWCO) to encourage woodland creation schemes with broad natural capital benefits. Blenheim Estate has committed poor arable land, most suited to forestry, to such a scheme, working in partnership with a corporate investor. The investor can simply buy the predicted carbon, often with a 25-year limit, but in the case of this pilot scheme, Morgan Sindall Group has invested in a broader ambition – including a high level of specifically defined community engagement commitments.
A visionary leader
John Morgan, Chief Executive at Morgan Sindall Group, along with his Sustainability and Procurement Lead Graham Edgell, have brought clarity of purpose to the blended finance concept. Morgan Sindall Group has shown clear leadership to invest in more than carbon, at prices that may reflect the future green book valuations – and certainly not the present unrealistically low levels.
The company also understands that landowners will not invest in schemes for nature recovery unless the maths is right. Prices under the current Woodland Carbon Code or the Woodland Carbon Guarantee do not facilitate the change that is required.
- Grade 3b or poorer sloping Cotswold brash
- Nine woodlands
- 85% broadleaf trees
- 22,000 tonnes of CO2 sequestered in the first 25 years
- Reduction in soil erosion into the River Dorn and River Glyme, which is silting up the Blenheim Lake
- Reduced nitrate and phosphate inputs
- Reduced run-off
- 16.5 km of new public access footpath connecting with existing networks
- Increased connectivity, giving better wildlife corridors
- A mosaic of habitats within the designed woodland, enhancing biodiversity
- Significant soil carbon sequestration Reduced air pollution
- Enhanced amenity of the landscape in an extensive arable belt
- The development of a shared forest school site.
Morgan Sindall Group has led on sustainable building practices by sharing data with the Carbon Disclosure Project to reduce its emissions as holistically as possible, only offsetting the unavoidable residual.
The company has chosen the UK to offset any residual tonnes, with the belief that you should offset and benefit the communities where the carbon is emitted. Morgan Sindall Group is one of the founding members of Grown in Britain, and firmly believes that we need to grow our own timber in the UK for the construction industries of the future.
The UK is a net importer of timber, importing £7.5bn in wood products. Statistically, the UK is one of the nations with the least woodland cover in Europe, sitting at 13% compared to the European average of 35%. Grown in Britain recognises the need for good silvicultural practice throughout the lifetime of the woodland, including weed control for early establishment, rabbit, deer and grey squirrel exclusion, and good thinning and silvicultural practices throughout the lifetime of the crop.
Landowners who plant trees today are growing a timber crop, in conjunction with all the associated benefits that well-designed and established woodland are known to provide.
The government’s role
Government ministers and departments have been working hard to collaborate on and develop schemes that support appropriate environmentally-beneficial land-use change. The new EWCO gives financial support to those schemes that offer broader natural capital benefits.
The Forestry Commission has developed the detail in the scheme to bring the ultimate result of driving land-use change in a sustainable way and encouraging woodland creation that offers the full cluster of environmental benefits. Complex issues around taking land out of residual agri-environmental schemes have been navigated to allow woodland creation projects to proceed this year.
John Lockhart, chairman of Lockhart Garratt and Non Executive Director on the Forest Services Board, says:
“It has been excellent to see FCF and the sector working in close partnership with the Forestry Commission to bring forward such a flagship project. The combination of effective regulation, high quality design and implementation, landowner and investor support is leading the way in developing a model that can demonstrate the real opportunities for landowners keen to embrace environmental land-use change as a business opportunity.”
Due to archaeological challenges, two of the woodlands at the Blenheim project have been withdrawn from planting this season for further archaeological study.
This FCF pilot scheme is engaging in extended research to develop the natural capital marketplace, including:
- Monitoring soil carbon before planting
- Monitoring air quality throughout the Blenheim estate and establishing correlations with tree planting
- Monitoring nitrates and phosphates in river water
- Drone monitoring of sequestered carbon as the trees grow
- Baseline studies of biodiversity to calibrate biodiversity net gain
- Exclusive use of plastic-free shelters
The commitment from the parties involved has facilitated a large-scale agri-environment project that will open countless opportunities for others to follow in an uncertain market that is now more accessible.