Application

The challenge – support for funding in the environment

We face a climate and nature crisis. Additional pressures such as population growth, habitat destruction, pollution, over-exploitation and invasive non-native species degrade and put our natural assets and the ecosystem services they provide at risk. This imposes significant costs on the economy, people and businesses, for example through flooding; degradation of soil quality; pollinator declines; air pollution; and loss of outdoor recreation areas.

Part of our response to these threats is to use a greater proportion of nature-based solutions that directly protect and enhance natural capital and that deliver multiple benefits sustainably over the long term. We should design projects and plans to create and enhance natural capital assets that are bigger, better and more joined up. In doing so, we contribute to a network of resilient places.

This approach can help to:

Fund and leverage more private-sector investment in nature-based interventions
Promote local ownership and stewardship of natural resources.

In order to do this we need more integration upfront of those who are benefitting from the environment and those who are managing it. The more we can link together the many different organisations, businesses and communities, the more we can stop the deterioration of the environment and make the most of future opportunities.

This often means having to try new ways of working and approaches with the natural environment, and there are a number of difficulties to overcome. Of course there is no one-size-fits-all solution but we can highlight some key areas and ways of working.

We should design projects and plans to create and enhance natural capital assets that are bigger, better and more joined up. In doing so, we contribute to a network of resilient places.

Taking a natural capital approach

What is a natural capital approach?

A natural capital approach is the understanding that nature underpins human wealth, health, wellbeing and culture.

The approach provides a practical framework to manage nature as an asset so that it can continue to provide services that benefit people. If we degrade the assets, the services and benefits we receive and value can’t be sustained. A natural capital approach focuses on sustainability by protecting and enhancing natural assets; it promotes management of ecosystems in a joined up way; and it delivers for people by focusing on what we value. Putting nature at the heart of our economy gives us stronger evidence to protect and enhance our natural environment – and a better articulation of a shared vision to support funding and investment.

Taking a natural capital approach to planning – The Cycle

Engagement and co-creation

Creating a natural capital investment plan

One way to sustainable finance and rebuild our natural world for people, a more resilient economy, and increased biodiversity, is to take a natural capital investment approach and develop strategies and plans which bring together the conservation, public and private sectors. There are clear signs that businesses and investors are keen to understand their dependency on the natural environment and how a better understanding of these connections can lead to significant benefits for society and nature, alongside the creation of business value.

Research has shown that there is no single way to develop a natural capital investment plan however the steps below are a guide of the different stages that most natural capital investment plans have followed.

A Natural Capital Investment Plan supports attraction of "blended investment" from different sectors.

* A natural capital investment strategy provides a strategic approach to defining the direction of travel and the vision for a programme of work. It is the start of a process to plan and coordinate what you aim to accomplish and how you will achieve it. Whereas, a natural capital investment plan leads from the top-level strategy and details what actions will be required, how they will be carried out, who will be involved and how the plan will be funded.

In order for a natural capital investment plan to be successful and attract a wide range of businesses and investments, it needs to cover more than just the natural world. A natural capital approach should identify and cover multiple benefits including biodiversity, health & wellbeing and access to green space.

Ideally, a natural capital investment plan approach would also develop a wide portfolio of projects which together encompass all of these multiple benefits which would then increase the range of potential business partners and investors. For example, carbon sequestration and an increase in biodiversity may be achieved by wetland habitat creation, whilst developing parks and greenspaces in a large town would help give deprived households better access to green spaces, encourage healthier lifestyles and help combat mental health issues.

It is also recommended that a natural capital investment plan approach should be based upon a hybrid, or blended, funding model where finances are drawn from a number of different sources. Ideally these would include both public and private sector funders. In such a model, these sources of finance would have different risk and return on investment expectations thereby offering flexibility. For example, a project might commence with public sector funding and then be expanded by the addition of business/investor finance attracted by the reduced level of perceived risk and the proven success of the project.

To find out more about developing a natural capital investment plan we recommend reviewing the Doubling Nature Investment Plan review found below:

Doubling Nature Investment Plan reviewGreater Manchester Natural Capital Investment Plan

Landscape Enterprise Networks

We, the LNCP team, funded the initial scoping work in Oxfordshire, where 3Keel have worked with the Berkshire, Buckinghamshire and Oxfordshire Wildlife Trust to investigate where and how a LENs approach could be applied within the county. Another aim of the work was to trial and review approaches that support investment in the environment – and the creation of partnerships that deliver this to multiple benefits for both the environment and investors.

A final aspect of this project looked at whether there were significant hurdles to the LENs approach being applied in different areas, by doing a comparison between the Oxfordshire scoping work and a previous LENs project in Northamptonshire. The results of this showed that it was possible to apply the LENs approach successfully in different landscapes and so it is an approach that could be utilised elsewhere within the country.

Download LENS oxfordshire Final report draft_revisedLandscape innovation – 3Keel

Creating a Landscape Enterprise Network

The challenge

The Landscape Enterprise Network (LENs) approach is an innovative and new approach that aims to link landscape management to the long-term needs of businesses and society by enabling businesses to work together and positively influence the quality and performance of the landscapes in which they operate. The LENs approach looks at the landscape from the perspective of business need – what are the risks and opportunities that landscapes present to businesses and therefore why should they engage. Business interests can range from water quality, resilient crop production, to the health and quality of life for their customers and employees.

The LENs approach works to build a series of place-based chains of transactions which enable groups of businesses to jointly procure landscapes outcomes from farmers or landowners that can make things happen on the ground. One of the aims of LENs is to break through the complexity and abstract theory surrounding sustainable landscapes and ecosystem services, and offer a different solution. It does this by breaking the system down into straightforward, practical transactions.

Illustration of basic operating unit of LENs network – produced by 3Keel

How does LENs work

A LENs project works by setting up and managing a regional trading system of value chains, each driving specific landscapes outcomes for different groupings of businesses. The process involves three steps:

LENs network analysis – this system links:

Beneficiaries (businesses) – that have a practical interest in the landscape e.g. agri-food sectors or housing developers
Landscape functions – which are the practical outcomes of a landscape that the beneficiaries are interested in e.g. production of foodstuffs, mitigation of flood risk, capacity of land to receive effluent
Landscape assets – which are the features of the landscape system (such as soils, habitats, rural skills) that underpin its ability to deliver the functions required of the beneficiaries

Produce the basic operating unit – This step focuses on building a first ‘anchor’ value chain and involves; working with the demand side interest to define a common specification for services, then working with the supply side to define a service proposition, and finally working with both to broker a deal
Develop a network – once the first value chain has been set up, it will create momentum and interest. This will attract more customers and suppliers which will extend the first value chain and build others

Why it is different

The LENs approach takes a different approach to funding improvements in the environment as it is demand-led and based on businesses, and the public sector, working together. It offers a different way forward as it allows a project to assess which methodologies might work in different environments and with different land, conservation, private and public sector players.

Network diagram showing the overlapping demands of these organisations and the assets which could be used to meet these shared needs – produced by 3Keel

LENs in practice

In Northamptonshire 3Keel have been working with the Wildlife Trust for Bedfordshire, Cambridgeshire and Northamptonshire and the Nene Valley Nature Improvement Area team to set up a LEN. They have identified Anglian Water, Nestle and Northamptonshire County Council as potential beneficiaries from this network as they require improvements in areas such as water quality, resilient wheat supply chains, reduced flood risk and meeting net zero carbon targets. The project has linked up with potential landowners who could be paid to deliver the improvements to the landscape that these organisations require and the first trades are expected to take place in 2021.

Separately in Oxfordshire 3Keel have worked with the Berkshire, Buckinghamshire and Oxfordshire Wildlife Trust to investigate where and how a LENs approach could be applied within the county. Through initial work with Thames Water, Blenheim Palace and Estate,
the East West Rail Alliance and Oxfordshire County Council they have identified common goals around biodiversity, water quality, flood management and carbon sequestration that could be addressed through improvements to assets within the landscape, see diagram to the left.

Developing your business plan

Unfortunately, it is hard to get funding just by having a good idea – you have to show that the idea is a good idea, the right idea for the time and the place and that it is worth the costs. This is a process of persuasion, using evidence and demonstrating that you have considered all the relevant facets of your plans. Commonly, this presentation of data, arguments and analysis is called a business case. This section will outline an approach to developing a business case for an environmental project.

Whether you are making a very formal business case using existing templates, or are just interested in how to do something simple but effective, there are some key aspects to consider. This page will outline these, and this section provides more pages if you want more detail on a commonly used template for more advanced approaches. These are worth reading to see how different aspects of a project need to be managed, but you don’t need to follow these approaches if your project doesn’t call for it.

Understand your audience
Answer the key questions for that audience

What is (are) the problem(s) that your project is going to solve?
Have you shown that you have chosen the best approach?
How will you manage your project so that it will achieve this?

Have you answered these questions in the best way for your audience

As is so often the case, communication is central. Understanding the expectations of your partners and funders, and ensuring they know your expectations, is critical. Businesses, NGOs and the public sector work at different paces, have different standards for evidence and often have different terms and jargon.

And of course we know that one-size approaches never fit all, so in this section we want to just aid the communication and uncover some helpful approaches.

helpful approaches. More information on a particular approach to business cases, known as the 5 Case Model, given here. Even if you don’t expect to have to use this template, the principles behind it are useful for any approach.
More information about Natural Capital Investment Planning is here to give an idea about the context of strategic planning for funding and investment.

Download Guide to developing the Project Business Case – gov.uk The Green Book: appraisal and evaluation in central government – gov.uk

An approach to business cases: The 5 case model

When building a business case and making a decision about whether to invest in the environment, or in any project, it is crucial for you to go back to the central question of -whether you have approached the decision from the right place. It should not be the case that you have made a decision which you then justify by making a business case that fits. Through your business case you will need to explore your options and show that the decision you have made is the right one and you can deliver it.

Depending on the nature of your project and what stage you are at, this information may be more or less applicable. We’re presenting it here both because the principles of covering the different aspects of project planning are always helpful, and because it is a good overview of how a project plan develops over time.

The 5 Cases

The 5 cases that give the model its name are the different aspects of a project plan that need to be considered. They are summarised on the right and you can see that they range from justifying the need for a project and showing you have chosen the right approach, to demonstrating that you can manage the project through procurement to delivery. In this guide we have focused on the first 2 cases, and given some information about developing these cases for environmental projects. You can use the menu on the right, or the text links below to learn more about these areas.

The 5 case model

Strategic case: demonstrating how your project fits into wider aims, programmes and policies; justifying the need for a project.
Economic case: demonstrating that the project will create as much benefits for the costs as possible; that it is the best possible option and that this option is desirable to society
Commercial case: if the project is expected to raise revenue, demonstrating that this will be managed well and appropriately
Financial case: showing that the funding and resourcing arrangements for the project are in place, are realistic and sustainable over time
Management case: showing that all aspects of the project will be managed appropriately over the whole life of the project

The 3 stages of plan development

The other dimension that this model encourages us to see it that our planning changes over time and with the scope of our project. Whilst we really don’t expect all projects to undergo these phases, we do think that outlining the approach here will be a helpful reminder that our requirements of a business case do change depending on context.

There are 3 stages of plan development, with a different emphasis on the 5 cases at each of these stages. These stages are:

Strategic outline case

This is about showing that your project is strategically necessary, and so puts the greatest emphasis on the strategic and economic cases. It is the first business case to prepare and it demonstrates that you have adequately scoped the project within the wider context, made the case for change and explored the way forward.

The SOC will focus in on the broader justification (strategic case) and demonstrating that it is worthwhile. In some cases – if the project is small or simple enough for the funder to accept it – the SOC is all that is necessary for a business case as it does cover all the aspects, but focuses on the big picture questions in the strategic case and the options appraisal part of the economic case.

Outline business case

This is where you show that you are planning for the successful procurement and delivery of your project. The outline business case is needed for more complex and larger projects. It builds on the SOC by developing all aspects of the project plans, but really starts to add emphasis on the commercial, financial and management cases.

The necessary components of an OBC are that you have shown the project is the best value for money way of achieving your goal (economic case), preparing the scheme for procurement (commercial case) and showing your scheme will be ran well (financial and management cases).

Outline business case

This is the phase where you move from planning the project into delivery. All 5 cases should be fully developed. It revisits the OBC and looks at how procurement was carried out, at what has changed since the OBC and puts in detailed plans of delivery, management and evaluation of the project.

Each of these builds upon the previous case, developing the information and analysis, and allowing decision makers to intervene at key points in the process. If it is not clear how much detail your funder or source wants in a business case, it would be good to discuss with them using a framework similar to that presented here.

One important consideration is always to remember who you are trying to persuade through your case: Is it your trustees, the private sector or the government you are trying to attract investment for? If there are existing protocols/guidance you have to follow, then follow these, but remember it is all ultimately about making a strong and clear case for justifying and resourcing your project.