An Environmentally Conscious Approach to the Arc
Four part Q&A with Peter Bachmann, Managing Director, Sustainable Infrastructure, Gresham House
1. What does sustainable land management mean to you and your team at Gresham House?
The principles of land management in the UK are changing rapidly and at Gresham House we are aiming to be at the forefront of implementing sustainable land management practices with our focus on the deployment of real assets (forestry, housing, renewable energy, sustainable infrastructure) and our ambition to provide permanent solutions for societal or environmental issues, whilst protecting and enhancing the multiple services and functions provided by land.
Within our Sustainable Infrastructure strategy, my team are aiming to achieve this through a range of sustainability-focused investment theses including use of land to decarbonise our energy system with traditional renewables, battery storage or GH Bio Power, a business that takes used cooking oil and turns it into renewable energy.
We have also created, from scratch, a new solution that provides direct biodiversity and nature impact for anyone who needs it. We have partnered with the Environment Bank to launch a new infrastructure product, ‘Habitat Banks’ where we restore degraded habitats on a large scale, into areas rich in biodiversity. This will in turn create Biodiversity Net Gain (BNG) credits, sale of these BNG credits is underpinned by a market for biodiversity net gain which is now part of planning law.
2. Are we missing a trick in respect of innovative approaches to accelerating decarbonisation and maximising environmental productivity?
Innovation is driven by the need for change. At Gresham House, accelerating the decarbonisation of business and society begins with understanding the problem, be it social or environmental. The trick is to find the innovative solutions that answer the problems we are trying to solve.
A great example of this, in the context of agricultural innovation and decarbonisation of food and environmental productivity, is our investment into Fischer Farms, a business which is currently building the world’s largest vertical farm in Norfolk. There are many positive environmental impacts from growing food in vertical farms. These include a drastic reduction in the use of land and water, a reduction in food miles (growing lettuce in the UK in winter instead of importing it from Europe by air), an increase in shelf life, the reduction in the use of fertiliser and pesticides as well as the avoidance of monocultures which contribute to the degradation of soils and loss of biodiversity.
It was our search for answers to the sustainability problems we face that led us to find the Environment Bank and to work with them to deliver their vision into an investable and scalable business model. By building large, new Habitat Banks, we will enhance the British countryside and provide the model through which corporate investment can meet its statutory, compliance or investor-driven requirements to become nature positive.
Another trick to spur innovation is regulation or the prospect of it. Maybe we should be discussing a carbon tax at a regional level to influence behaviour and fund innovation – even the conversation could spark change?
We are also hyper-focused on the role that nature-based solutions will have on accelerating decarbonisation and maximising environmental productivity.
3. What does the future of agriculture look like within the Oxford-Cambridge Arc?
Clearly land use will change in the Oxford-Cambridge Arc as a result of proposed new development, including infrastructure, and through the transitioning away from agricultural basic payment scheme funding.
East Anglia is also the driest region of the UK, and it will be critically important to conserve and expand water services and availability as a result of climate change – the recent report from Water Resources East makes that very clear. Nonetheless, agriculture will remain a major land use, though its impact on the environment will undoubtedly reduce. This will be catalysed by wider societal changes driven by climate concerns, like a shift to more plant-based foods, innovation in farming practices and an emphasis on land providing ecosystem services. The good news is this will bring diversification opportunities for custodians of land.
The business model for habitat banks that we have constructed with Environment Bank is designed to do exactly that. It will allow farmers to keep farming and to include nature, whether producing biodiversity net gain or other ecosystem services such as flood mitigation or mineral storage, in their portfolio of products and to secure a long-term, guaranteed income stream for doing so.
4. How do these innovations collectively enhance and improve upon the natural environment?
Firstly, we need a rapid move away from intensified farming and development that disregards environmental impacts that has caused so much damage to the extent and distribution of habitat and wildlife species in the UK.
The innovative solutions we have highlighted above are just a snapshot of some of the things we are doing at Gresham House. As a team, we implement a strict ESG decisioning framework that assesses the positive and negative environmental impacts of our investments. We then have detailed reporting at a portfolio level to track the tangible benefits for the natural environment we create. To give a few real-world examples of our investee businesses and their impacts:
- Fischer Farms - For every single acre of land that a vertical farm occupies, you would need over 250 acres of conventional farmland to produce the same amount of food – a staggering increase in land productivity.
- Environment Bank - 40m birds have vanished from the UK’s skies in the last 50 years. Aggregating biodiversity creation in large habitat banks creates a much bigger conservation impact due to biodiversity multiplier benefits compared to small pockets. Lack of biodiversity is a World Economic Risk Report top five risk in terms of likelihood and impact.
- Waste Knot - Saves 668,000 tonnes of CO2 per year by converting c.300k tonnes a year of commercial and industrial waste into pellets that can replace coal in heat intensive industries such as cement and steel production. To get the equivalent benefit, one would need to install over 3GW of solar which would require over 12,000 acres of land.
We think these benefits are pretty powerful.
Get in touch
Peter Bachmann
Managing Director, Sustainable Infrastructure