Editor’s note: nature boost requirement begins for UK housing developers
The latest edition of our Sustainable Views newsletter
Dear reader,
Today marks the start of “biodiversity net gain” in England, a legal requirement that will compel housing developers to deliver at least a 10 per cent improvement in biodiversity when carrying out large building projects. Developers are expected to avoid damaging nature when undertaking projects and, where this isn’t possible, they will either have to create new habitats or improve existing ones on the same site, or elsewhere.
Should developers argue they are unable to build or enhance any habitats, they can instead buy biodiversity credits via the private market. The UK government says these credits will be available as a last resort to stop delays in England’s already congested planning system.
As we’ve learned from carbon credits, how these biodiversity credits are monitored — potentially via regulation and standards issued by the government and industry — will be essential to ensuring their integrity, and for increasing biodiversity. Helen Avery, director of nature programmes at UK-based research organisation the Green Finance Institute, says the introduction of BNG is “an unprecedented opportunity to channel private finance into nature at scale and deliver meaningful ecological outcomes”. Avery adds that BNG “will require continued support, clarity and guidance from the government”.
Our lead story today considers the global fast-fashion industry, which, along with its supply chain, is responsible for a 10th of global emissions. Due diligence legislation, such as the EU Corporate Sustainability Due Diligence Directive, would introduce compulsory sustainability and workers’ rights reporting, and experts tell Florence to expect similar laws in other jurisdictions soon. You can learn about the potential benefits of due diligence rules for fast fashion here.
Debates over the fiduciary duties that apply to pension scheme trustees have largely unfolded in the US, where some trustees have come under fire from rightwing anti-ESG politicians. The matter is more settled in the UK, although the extent to which schemes can invest in “non-financial factors” — a euphemism that has often been understood as including ESG — remains a matter for discussion.
Some organisations, such as the Association of Pension Lawyers, do not believe UK law allows for any financial detriment to schemes as a result of non-financial factors. But the Financial Markets Law Committee, an educational charity focusing on financial law, has offered its view and contends that sustainability is indeed a “financial factor” for UK pension schemes. You can read our summary and find the original argument here.
Finally, nine financial institutions have been recognised for their net zero policies and commitment to ending their financing of fossil fuels, according to a report by the Centre for Climate Finance and Investment at Imperial College London and non-profit Carbon Tracker. French bank La Banque Postale, New York City Retirement Systems and UK-based investment management firm Sarasin & Partners are among those recognised in the report.
Until tomorrow,
Alex
Alex Janiaud is the senior investment correspondent at Sustainable Views