Gresham House has unveiled a pioneering $380 million investment fund designed to synergize with England's newly implemented Biodiversity Net Gain (BNG) regulations, fostering investments in biodiversity credits. This fund, developed in collaboration with cornerstone investors Willis Tower Watson (WTW) and partnership with Environment Bank, aligns financial returns with the generation of biodiversity improvements under the BNG scheme that mandates developers to achieve a minimum 10% increase in biodiversity on new projects.
The fund, known as the Gresham House Biodiversity Co-Invest strategy, aims to marshal $380 million towards establishing 'Habitat Banks' across England. These banks, facilitated by Environment Bank within Gresham House's British Sustainable Infrastructure Fund (BSIF) Strategy, are set to convert underutilized land into thriving habitats that support woodlands, wetlands, and species-rich grasslands, producing biodiversity credits that meet BNG criteria.
This initiative arrives in response to the BNG regulations, which, as of last week, require all new housing, building, and infrastructure projects in England to contribute positively to the area's biodiversity. This can be achieved by creating new habitats, funding third-party nature projects, or purchasing government-issued credits as a measure of last resort.
The establishment of Habitat Banks by Environment Bank is projected to significantly contribute to the biodiversity credit market, potentially generating a substantial annual market value. This development aims to alleviate concerns around the scarcity and cost of biodiversity credits for developers by providing a scalable, funded solution to meet BNG requirements.
WTW's global head of infrastructure research, So Yeun Lim, highlighted the growing demand for nature-positive investments and the critical role of investable nature-based solutions in achieving environmental impacts alongside financial returns. Environment Bank's ambition to develop approximately 8,000 hectares of Habitat Banks by 2026 is expected to dramatically enhance species diversity, with over 3,500 hectares currently in development or secured.
Peter Bachmann, managing director of sustainable infrastructure at Gresham House, said that consensus was "rapidly growing among political and business leaders that we cannot combat the climate crisis without addressing biodiversity loss."
"We are extremely proud of having co-created a nature-based solution with EBL tailored to the needs of the UK government and industry alike," he said. "With the UK in the bottom 10 percent globally regarding biodiversity, we can see no better place to partner with forward-thinking investors such as WTW to tackle this grave threat.
"Gresham House remains committed to addressing the challenges posed by biodiversity loss through nature-based solutions that set industry standards for ecological integrity."
The fund's launch coincides with industry apprehensions regarding the adequacy of land for BNG purposes, as revealed by a survey conducted by The Land Trust in collaboration with industry bodies. The survey indicated widespread concern over land availability and the potential shortage of biodiversity units, underscoring the timely nature of Gresham House's initiative to provide a viable pathway for developers to meet BNG requirements and contribute to the UK's ecological restoration.