You may be familiar with the term, ‘natural capital’, referring to the UK’s stock of natural assets, essentially the environment – our forests, rivers, land and sea. Farmers and landowners have always understood their value.
The Government more formally now recognise this. As part of its 2015 manifesto commitment, they established a Natural Capital Committee with the intention of applying hard economic numbers to the environment’s value and ensuring resources are directed where they are most needed. To this end, the committee is in the process of developing what we believe to be the first 25-year environmental plan for the UK. Whilst many are sceptical that this is an over-complication of what, for those engaged in land management, is obvious, this initiative is gaining momentum and must be taken seriously. It could well create valuable new opportunities.
What is Natural Capital
The Country Landowners’ Association (CLA) has conducted considerable research into the rural economy, exploring ways to achieve the ‘perfect natural world’ scenario and, importantly, how this can be funded. While more than half (52%) of landowners currently invest in their natural capital, they tend to be motivated by their sense of stewardship rather than any expectation of gain. Delivering better environmental outcomes could open up untapped potential by creating commercial opportunities for landowning rural businesses. Looking ahead, publicly funded schemes are likely to remain the primary source of funding for investment in natural capital.
However, the CLA argues that by Government and land-based businesses working together we can avoid the bureaucratic, inflexible schemes of the past. Its vision is that by taking a commercial approach and establishing natural capital as a marketable service, by 2030 private and public investment in natural capital will be seen as a profitable part of being a rural business.
For most landowners, the first step will be to establish a baseline by producing a natural capital account which is a valuation of various natural assets on your land, and how that interacts with the environment through air, soil and water to provide ‘ecosystem services’.
Land management decisions will then be formed by this, identifying potential income streams. As Policy evolves and opportunities arise we want to ensure we are able to assist clients make the most of new opportunities.
