Moving infra from net-loss to nature-positive

Nature is in crisis. As human societies have industrialised over the past few centuries, plants and animals have disappeared at an alarming rate. Just since 1970, the World Wide Fund for Nature says that the populations of animal species it monitors have suffered an average decline of 69 percent.

On the positive side, the world has finally begun to pay attention to the biodiversity crisis. The COP15 biodiversity conference, held in Montreal last December, produced a historic deal to stem the tide towards mass extinctions. The agreement saw governments commit to ambitious targets, including a goal for protected areas to cover 30 percent of the Earth’s land and oceans by 2030.

Across the alternative asset classes, fund managers have increasingly identified nature as a priority area within their ESG strategies. Meanwhile, an architecture of measurement and reporting frameworks have begun to take shape. The Taskforce on Nature-related Financial Disclosures (TNFD) is developing a framework along the same lines as the more established Taskforce on Climate-related Financial Disclosures (TCFD).

It could well be argued that the infrastructure sector has a special responsibility towards nature. After all, infrastructure projects have historically been a major cause of biodiversity loss.

Roads and railways have sliced through habitats, power stations have belched greenhouse gases into the atmosphere, and water treatment plants have polluted rivers and oceans. Even wind farms face significant scrutiny over their effects on birds.

There is growing interest in designing infrastructure that breaks this pattern and provides benefits for nature. But, with time running out to protect what is left of the Earth’s biodiversity, can the asset class deliver before it is too late?

Working with nature

Of course, new infrastructure projects – notably in Europe – have had to comply with stringent regulations to minimise harm to biodiversity for decades. More recently, however, the idea that ‘no net loss’ should be the main goal for developers has started to be seen as inadequate.

Instead, the ambition that developments should be ‘nature-positive’ – producing overall gains for nature – has come to the fore. Under legislation that will come into force from November, planning permission in England, for example, will require developments to produce a ‘net gain’ in biodiversity of at least 10 percent.

At the same time, infrastructure planners have realised that wildlife and natural ecosystems can produce benefits – sometimes labelled ‘ecosystem services’ or ‘nature-based solutions’ – for human populations.

“The value of nature for providing certain infrastructure services is seriously underestimated,” says Liesbeth Casier, co-ordinator of the International Institute for Sustainable Development’s Nature-Based Infrastructure Global Resource Centre.

Casier notes the example of how green spaces in cities, which offer a habitat for wildlife, can also “operate like sponges” and help prevent flooding following periods of heavy rainfall. “It is actually much more effective than built stormwater solutions,” she says.

It is worth bearing in mind that the biodiversity crisis and the climate crisis are closely interconnected. The loss of rainforests, for example, has accelerated the rise in temperatures, while a hotter climate and more erratic weather patterns are significant drivers of biodiversity loss.

“Designing nature-based solutions into infrastructure can both help with climate change adaptation, as well as climate change mitigation,” says Dima Zogheib, associate director at Arup, a company that designs and plans infrastructure and other building projects.

“We think about infrastructure and natural ecosystems as both manmade and natural assets. We see them as assets that really protect us, provide new things, but also connect us as human beings – and we see those as the support systems for our everyday life in cities.”

Particularly in urban areas, nature-based solutions tied to infrastructure can also deliver positive social benefits – providing outdoor spaces that promote connectivity and exercise, for example. Zogheib cites the example of New York’s High Line, a disused railway that was converted into a linear green space in 2019. The project provides a habitat for 33 species of bees, among other wildlife, and boasts 150,000 plants, trees and shrubs.

“The High Line has had a ripple effect all over the world. Everybody wants a High Line,” says Zogheib. “Now, everybody is thinking about their infrastructure that they are not using, or that is under-utilised, to actually think about nature-based solutions to bring nature back to the city.”

It is not only disused infrastructure that can provide comparable benefits to wildlife. Working railway lines can also be designed to provide green corridors for wildlife. Zogheib notes that the Eurostar rail link was designed to provide a wildlife corridor. “Because of the railway corridor, we had an immense increase in tree planting and an immense increase in biodiversity,” she says.

Solar strives for biodiversity gain

Solar power is rapidly emerging as one of the cornerstones of the modern energy system. Huge areas will be carpeted with photovoltaic panels in the coming years; the International Energy Agency says a sevenfold increase in solar generation is needed by 2030 to keep the world on track for net-zero goals.

Ross Grier is the UK managing director at NextEnergy Capital, which manages a fund that invests in solar assets in the UK. He believes the industry has a “unique opportunity” to develop sites that bring benefits for biodiversity.

“What we realised was we could tailor measures around the solar operation that would foster ecosystem services for that surrounding community,” he says. “We end up providing a much better outcome for society than just the green power. What we are doing is actually creating these hubs that protect biodiversity.”

A report published last year by Solar Energy UK, an industry association, found that well-managed solar sites can lead to a “dramatic” increase in biodiversity. It cited several examples showing an increase in bird and insect species at solar farms where ecological monitoring took place. The report also noted that techniques such as planting wildflowers among solar panels can boost pollinator species, which then in turn pollinate crops on surrounding farmland.

Achieving biodiversity benefits on solar farms is not cheap or simple, however. “It is very delicate – it requires a lot of joined-up thinking,” says Grier. He notes that NextEnergy uses specialist ecology consultants to design solutions that are highly tailored to specific locations. “You can trip over yourself trying to do the right thing here by implementing measures in the wrong place that stop you from managing your asset effectively.”

Indeed, the fact that such specialised and asset-specific solutions are required creates a challenge for measurement and reporting. There is no simple way of comparing how biodiversity is faring in different locations.

“One of the real issues you have got in this space is it is very difficult to get consistent data on how measures are being effective,” says Grier. “You have to have really robust baselining across all of your assets in order to see how things progress out into the future.”

Habitat banks

The difficulty of measuring how infrastructure affects biodiversity – and in comparing impacts across different types of projects – will be a major hurdle to scaling-up investment in ­nature-based solutions.

Promising to create ‘nature-positive’ infrastructure is much easier than actually delivering measurable improvements to biodiversity. For example, simply carving out a green space alongside an infrastructure scheme, without making any effort to create functioning ecosystems on the space, is unlikely to create significant benefits for biodiversity.

“I think the danger is greenwashing,” says Zogheib. “This is where we need to be very careful of not providing green space for the sake of green space.”

Indeed, achieving a 10 percent ‘net gain’ in biodiversity is easier said than done. It certainly remains to be seen how this will work in practice when new planning rules take effect in England. If a project causes the loss of 100 hedgehogs, can this be compensated for with the gain of 110 squirrels?

In practice, many developers will rely on offsets to comply with England’s net gain requirement. This will involve funding ‘habitat banks’ at a different location to the site of the infrastructure project. Multiple investors are exploring how this requirement will lead to a market for ‘biodiversity credits’ developing.

A spokesperson for the UK Infrastructure Bank says: “UKIB is carefully monitoring where we can most effectively play a role to enhance and crowd-in investment. There is still uncertainty about the demand for offsite habitat creation and the price of biodiversity units.

“It may be appropriate for the bank to step in and take additional risk to bring forward necessary supply. We could do this by investing in habitat banks when private capital is unable to price the risks.”

There is clearly much work to be done before nature-positive infrastructure becomes the norm, rather than the exception. For centuries, infrastructure has been designed to conquer nature; the idea that developers should work with nature, rather than against it, is only just beginning to gain traction.