On 18th November we hosted the third instalment in our series of roundtables for the Green Entrepreneurship Forum: a new policy initiative we are running with Mishcon de Reya that brings together the UK’s most successful sustainability driven entrepreneurs to help support their growth and inform us on the policies they need to flourish.
As natural resources are declining and demand is increasing, the commercial value of natural resources that benefit people are becoming more visible. At this online roundtable we discussed how companies could create benefits for both themselves and the planet by investing in “natural capital”.
Alex Rhodes, Head of Purpose at Mishcon de Reya and a Fellow at the Royal Geographic Society, and a Conservation Fellow at the Zoology Society of London, opened the discussion by looking at COP26, in particular the rules to strengthen the integrity of Carbon Markets. The WWF Living Planet Report showed that we have destroyed about 60% of our biodiversity since 1970. Alex observed that this was one of the biggest challenges for the international markets and policy, as many of the countries with significant ecosystems such as rainforests need support transitioning their economies. Alex also identified 3 areas Mischon De Reya has seen changes in relation to biodiversity:
1. Investment markets have an increased focus on trying to understand what biodiversity is, how to measure it and how to report on it.
2. Development companies are looking at net positive biodiversity in relation to infrastructure.
3. Changes to agricultural subsidies and that move from the common agricultural policy’s system of paying people by the acre to a new policy of environmental ecosystem based payments which the government is currently trialling.
Next we heard from Ben Goldsmith, CEO of Menhaden and board member for DEFRA. Ben shared that his lifelong fanaticism for nature started as a child, and observed that one of the fundamental problems in our society is that most people lose their connection with nature as they grow into adult life. But, he can see through his work that people are rediscovering that connection in a kind of societally important way, and that is being reflected in global policy. At COP26 policymakers are talking about climate change and nature in the same context. In the UK there are new, significant budget initiatives around nature such as the Nature Climate Fund where £750m is available for restoring peatlands and forests and the new agricultural payments regime which, after a seven year transition period, will be focused entirely on rewarding land managers for restoring nature. The UK is also at the centre of new deals around slowing and ending deforestation, restoring mangroves and creating new marine protected areas.
We then heard from Will Wells, Founder and President of Hummingbird Technologies, an Agri-tech platform which monitors natural resources from space using imagery and deep learning models and detects climate positive switches in regenerative agriculture. He shared his perspective as a leader in the emerging climate tech landscape, which he believes will not only be a great employer but will make a huge difference to the environment. His career has focused on three big questions.
How can we produce food in a way that is regenerative - whilst agriculture, land use and forestry is responsible for 20% of all greenhouse gas emissions, it also has the potential to be a trillion metric tonne carbon sink?
How can technology be leveraged to measure, monitor and verify the natural resources that are being preserved so governments and big companies can reward responsible producers?
How can we get government politicians and everyone to unite on upstream biodiversity loss in the form of the global deforestation pledge?
Finally, we heard from Richard Roberts, Head of Research at Volans. Richard shared his enthusiasm for the forum because change requires enlightened businesses to engage in politics - as Ronald Reagan once said “politics is too important to leave it to the politicians”. Richard felt that the snail's pace of the COP26 process masks the significant collective change that is happening to our society. Another quote that gets used is from one of of Ernest Hemingway's novels where a character is asked how they went bankrupt, and the answer is “First, gradually, then suddenly”, which applies to the current environmental agenda which has been gradual for such a long time, but is now shifting into a phase of sudden capital, policy, and technology convergence to address the issue. Richard also shared some of his ‘Tomorrows Capitalism’ research that has shown that we have been running an economy that is in ecological deficit for a very long time, and the consequences of that are now becoming apparent. We are going to be paying off that ecological debt for a long time, but that creates a big opportunity for regenerative agribusiness and any business that is helping to restore nature and biodiversity.
A number of ideas were shared during the ongoing discussion, including the following:
There is a significant political appetite for the government to raise its ambitions in environmental policy, particularly from younger MPs and Red Wall MPs.
The carbon credits system is masking the problem that all production has a carbon cost. Globally we need to ensure the carbon credits system can be strengthened to ensure that carbon credits are invested in a more effective and measured way, such as the Saudi system where developers are making direct contributions to marine conservation which is creating a long lasting carbon sink. We need higher fidelity, better monitoring, better measuring and a more robust and honest carbon credit system.
Local authorities need to review their procurement system to invest in new green technologies. They are held back by procurement lists which mean they can only work with certain suppliers, stopping them from using more innovative and sustainable solutions. There are also barriers created by local politics which stand in the way of council efficiency and innovation.
Procurement is also a challenge when companies are looking to work with farmers. For example, biochar is part of the government plan with a goal to produce 5 million tonnes of it annually by 2040. However, there are barriers for biochar organisations looking to work with farmers who often work in a traditional way and do not have a lot of spare resources to look at new business models or suppliers. DEFRA is investing in organisations which build relationships with farmers to help educate them about new innovations, so these provide an opportunity for entrepreneurs in this sector.
Schools could educate children on the positive changes that are being made to improve the environment and how these work in different regions.
Water is becoming an increasingly stressed resource, and one of the areas DEFRA could look at is how to incentivise farmers to put in more nature based solutions, such as chalk streams, rather than relying on water treatment works, and how to get to scale.
We also need to review the regulation, which does not recognise the integrated nature of natural solutions. For example, if a company takes waste water from a treatment works and puts it into a wetland, they need a waste management licence.
Nature is very place based, and there is an argument that we need to shift to seeing more businesses which are grounded in their local communities. This creates an existential challenge for the big multinationals with complex supply chains, but there is recognition particularly in food and agricultural companies that they need to reinvest in regenerative nature.
Corporate measurements of sustainability are extremely varied, depending on the individual companies focus or product. For example, Nestle are interested in 1000 farms upstream in the Amazon and deforestation, British Sugar might be about sugar bean fields and soil erosion, Wessex Water might be looking at planting cover crops near a river, and Diageo might be looking at carbon emissions across their supply chain so we can buy a zero emission pint. They are engaged, but it is extremely fragmented.
One of the challenges for the UK is we only account for 1% of world carbon emissions, and unless we can change things on a global scale we are making a tiny contribution. To make global changes we need to look at reducing other factors such as conflict and poverty to influence the economies and priorities of other nations.
If you took all the degraded land in the world it would be a greater land mass than Russia.
Our next roundtable is on 12th January, where we will be exploring ‘The Value of Nought - How to align your business with Net Zero’ . If you would like to get involved in the Green Entrepreneurship Forum and contribute to this roundtable please email katrina@tenentrepreneurs.org.