Natural Capital Law

We provide comprehensive advice on the various structures and all underpinning legal documentation that can be used to set up intermediary schemes between landowners wanting to offer biodiversity units, nutrient credits or other nature credits from habitat banks and developers/others wishing to buy them.

• We have advised Biofarm Ltd, an innovative start-up habitat bank operator, on the set-up arrangements of their business model and all underlying conservation covenant and s106 agreements. We have also advised on various mechanisms to ring-fence habitat bank maintenance funds including corporate tax advice, setting up a new corporate entity and liaising with financial institutions to implement an investment strategy
• We have advised Greenshank Environmental Ltd on template commercial agreements when they were moving into providing Biodiversity Net Gain and nutrient neutrality services
• We are currently advising Nature Thrive Ltd on the legal agreements needed to create high integrity habitat banks for Biodiversity Net Gain
• Related to this, we have also worked with Wessex Water Ltd trading as EnTrade, an operator of online catchment nature markets. We undertook a legal review of its operational documents, looking at a full range of issues including contractual, regulatory and planning.

We advise many developers on day-to-day compliance concerns relating to BNG and water/nutrient neutrality issues. We also negotiate the terms of nitrate/phosphate credit and biodiversity unit purchase/sale agreements for a number of clients and conduct due diligence on the suites of documents underpinning the relevant schemes so as to ensure that the credits/units, once purchased, are acceptable to Natural England/the local planning authority. 

We are currently acting for a solar farm business (confidential at present) looking to create and sell biodiversity units from their solar sites.

We are advising Northumbrian Water Group in connection with the forthcoming mandatory BNG needs for large-scale infrastructure projects it is currently working on.

Examples of some of our other clients in this category are: LNT Care Developments Group Ltd, Persimmon Homes, Lindum Homes, Bellway Homes, Abbey Developments Ltd, Aldi Stores Ltd, Countryside Properties Ltd, Chancerygate Ltd, Daedalus Ltd, Keepmoat Homes Ltd, Kingsbridge Estates. 

We have also provided strategic advice to:

• Tarmac Ltd on setting up their own habitat banks
• Wates Developments Ltd and NPL Group on setting up specific habitat banks

We are advising multiple individual landowners on setting up habitat banks on their land.

• We are advising Hospital of St John, Heytesbury on their phosphate credit sale agreements to Wild Capital
• We have acted for The Box Moor Trust, a registered charity, on the creation of a Suitable Alternative Natural Greenspace (SANG). This scheme is now generating SANG credits, which is unlocking development in the region by alleviating recreational pressure on the Chilterns Beechwoods Special Area of Conservation
• We have advised third sector organisations on setting up habitat banks, for example Derbyshire Wildlife Trust and Trust for Oxfordshire’s Environment

Our Natural Capital legal team advises local authorities on all aspects of the increasingly popular habitat bank schemes which local authorities are setting up, including the corporate structure of the habitat bank vehicle (HBV), reviewing and advising on the equity models, site/title due diligence, operational leases and land maintenance agreements, the creation of the HBV, drafting the necessary conservation covenants to secure the habitat bank and drafting the accompanying allocation agreements/credit purchase agreements for the sale of the offsite biodiversity units/credits and associated environmental law and policy considerations.

Examples of our clients in this category are:

• Plymouth City Council: We advised the Council on the creation of the UK’s first HBV called Ocean City Nature which is designed to generate and sell biodiversity units to enable developers to meet their mandatory Biodiversity Net Gain requirements
• North Somerset Council, Leeds City Council, Stockport Council: We are working with each of these Councils to help them establish habitat banks on Council owned land for the creation of off-site biodiversity units for the mandatory Biodiversity Net Gain market
• Cumbria Partnership: We are working with the Cumbria Partnership to create landscape scale schemes using land owned by the partners (Westmorland and Furness Council, the Lake District National Park Authority, Cumberland Council and Cumbria Wildlife Trust) for the creation of off-site biodiversity units for the mandatory BNG market as well as the creation of nutrient credits
• Bournemouth, Christchurch and Poole Council in the Stour Valley, Dorset: We have provided strategic advice to Bournemouth, Christchurch and Poole Council on the potential legal mechanisms needed to work with landowners for the creation of off-site biodiversity units for the mandatory Biodiversity Net Gain market
• Advance Northumberland (the economic development arm of Northumberland County Council): We are working with this habitat bank operator to provide off-site biodiversity units which will unlock huge investment opportunities in Northumberland whilst enhancing the local environment.

We have also advised local authorities who are negotiating with intermediary businesses who will assist them in setting up habitat banks on the local authorities’ land. Examples include West Lancashire Council and North Yorkshire Council.

We have advised both lenders and borrowers on funding for a large number of sustainable schemes, including both green and sustainability linked loans. We have also liaised with financial institutions to implement natural capital investment strategies.

As an example Freeths has provided corporate, commercial and tax law advice to a major financial investor wishing to invest in a project to enhance ecosystem integrity at a large estate in Yorkshire. The project involves developing and implementing an Ecosystem Restoration Plan that captures and evidences improvements in environmental assets. These enhancements - monetised through BNG Units, bundled Nature Credits, and Carbon Credits - will be sold to third party purchasers as “Nature Investment Assets”, enabling a financial return on nature-based investment.  We have so far advised on the corporate and tax implications linked to the structuring of the deal and will be drafting and negotiating all the relevant agreements to underpin it. 

We have provided legal advice to a number of organisations to assist them in registering as Responsible Bodies so as to be able to “police” Conservation Covenant agreements underpinning nature projects. 

We have also provided template conservation covenant agreements to various Responsible Bodies, such as for RSK Biocensus Ltd.

Our planning lawyers, consultants and advocates are experts in drafting the legal agreements needed to secure habitat creation and land management changes underpinning nature credits whether through section 106 agreements or conservation covenants (including side agreements). They also carry out due diligence for many client types on these required legal documents when clients are looking to purchase credits.

We have drafted a great many of these agreements for various clients.    

We have provided legal advice to the Environmental Markets Board on nature market governance issues and the Board’s set up and operations.

Freeths is currently advising on several landscape recovery schemes across some of the UK’s most iconic landscapes, including complex habitats such as rivers and upland areas:

• Calder and Colne Landscape Links
• Connecting Constable & Gainsborough Country Landscape Recovery Project
• Central Dartmoor Landscape Recovery Scheme

We have partnered NatureSpace Partnerships Ltd from the outset in 2016, to allow them to provide, in conjunction with the Newt Conservation Partnership, strategic landscape-scale wetland habitats for Great Crested Newt (GCN) and other wildlife within a compliance scheme used by developers. We have also advised NatureSpace on using similar models to deliver GCN and other wildlife landscape scale solutions for many large national infrastructure projects across the country.