#smenaturepositivefinance
Here you can find out more from our SME Nature Positive Finance conference held at Middlesex University on 15th March 2024. Here we heard from expert speakers, presentations from the research team and our SME case study innovators from the NERC-funded research project SME Nature-Positive Finance.
Afternoon Session
The afternoon showcases Middlesex University research and SME trailblazers presenting ecological tech solutions for agrifood, textiles and fashion and critical environmental enablers and drivers in infrastructure and transport.
In collaboration with:
Afternoon session: speakers, notes and Powerpoint presentations
CHANGEMAKERS SEEDING INNOVATION
A. “Tech Solutions, financing optimising land Use and Biodiversity”
Professor Robyn Owen, MDX – SME ecological services innovation
Each sector has a different relationship to nature and requires different measures and different investments. Key issues with green finance are information asymmetries, particularly in not knowing what a nature-positive financial return might look like, and the lack of a "green dividend" where innovations deliver public goods (such as improved health and productivity) but this is not necessarily reflected in investment returns. If no baseline exists, then it is hard to measure. Improved measurement and understanding of nature-based solutions is critical to the green finance markets.
Robyn highlighted various environmental services case studies, including:
Dr Tom Breeze, University of Reading – Innovations in ecological technology
Tom works on the economics of pollination and monitoring of biodiversity – he noted that are losing species before we can record them. Despite investment in agri-environmental schemes, there is little evidence these work and there isn't much change in farming practices. He reflected that monitoring was frowned upon before as it had little value. Now "people want the data that we didn't measure 10 years ago".
Tom highlighted his work in the EU-level MAMBO project, which explores the measurement of biodiversity. NB: the EU parliament is debating a Nature Restoration law that will require EU states to restore 30% of their habitat by 2030, which includes supporting pollinators.
Professor Fergus Lyon, MDX - Agrifood innovation
Fergus is a university professor focussing on sustainable enterprise and is also a farmer using regenerative principles. Agri-food is at the cutting edge of biodiversity loss and the sector includes many SMEs, yet SMEs are exempt from the reporting requirements. Fergus explored whether if farmers are forced to change, how can we enable a just transition? He gave examples from various types of approach farmers can get involved in and some of the risks and opportunities in doing so:
- Offsetting (biodiversity net gain and nutrient neutrality)
- Insetting - payments for environmental services
- Public sector land management schemes
Tonye Khama, EnrichGeo
An agritech company that has worked in Nigeria, Cameron and Kenya and has evolved into a UK-based company that seeks to support farmers in the Global South with access to international markets. EnrichGeo supports geospatial analytics and logistics and warehouse capabilities using blockchain and utilising machine learning, AI and data analytics.
Andrea Werner, Fashion and Textiles
One of the most environmentally damaging sectors. Many clothes are made from fossil fuels, with damaging polluting impacts.
The SME Nature Finance project focuses on SMEs seeking to innovate with natural materials - cotton, wool, hemp and leather - (since fossil fuels have a very negative end-of-life disposal chain). Andrea shared some examples of interesting case studies in the sector:
B. Critical Environmental & Economic ENABLERS & DRIVERS
Dr Amy Burnett MDX - SME infrastructure and Transport drivers
Amy discussed the linked sectors of planning and transport as they relate to land-side environmental impacts.
Planning and construction
Amy emphasised the role of planning and its various instruments (notably BNG and nutrient neutrality) and their ability to influence development location, design, environmental management and liveability. She also discussed how some long-standing planning mechanisms such as conservation covenants might also be used to stimulate new environmental governance and nature markets.
Amy also highlighted how these can enable community investment, redistributive finance and include SMEs as wider investors or suppliers of land and environmental initiatives.
Amy highlighted various planning-related cases:
BNG and Belmont Estate, Somerset
Mayday Saxonvale, Frome, Somerset - the UK's first proposed community-led masterplan
Transport: freight and logistics
Many transport, freight and haulage firms have implicit impacts on the environment and nature through the choice of and disposal of packaging and materials, air pollution and the siting the design of logistical infrastructure. However, these are not widely measured and often barely understood. Amy highlighted a need to build nature metrics into the backend of logistical supply chains to align with nature-based impacts and links to supply chain finance and drivers.
Amy highlighted various transport-related cases:
Oxwash - the UK’s first on-demand clothes-washing service
Segro - a corporate working with SME tenants and funding offsetting
Amy concluded that there is a need for the SDGs and the TNFD to be better integrated into planning decision-making as well as corporate and SME reporting and investments (see the work of MDX Phd Student, Nia Niajatali).
SME Innovators
Biotrain, Dr Beverley Nielsen
Beverley presented the case of Biotrain, a West Midlands innovative transport solution that uses biomethane (a circular economy gas) or green hydrogen (requires energy-intensive production using green electricity and needs compression). She highlighted that community-led approaches are key to delivering nature-positive sectoral innovations.
BNG Hallow Fields, Beverley Nielsen
Through a 45-acre field purchased and managed by Malvern Hills District Council the community is actively engaged in a strategy for nature recovery and in helping measure the impacts. The Council held a crowdfunding campaign which on 11th May 2023 successfully raised £8,710 with 62 supporters in 42 days via crowdfunded. Beverley is involved in exploring how BNG can support a local green community finance fund and she would like to see more cooperation for the 'shire counties' to work together to develop regional innovative, community-led nature recovery and environmental finance opportunities.
Mapping the TNFD and the SDGs
The Sustainable Development Goals (SDGs) are a set of goals and related indicators that seek to support transitions to a more sustainable society.
The Taskforce on Nature-Related Disclosures is an important collaboration between leading financiers and experts in nature-based financing that aims to shape investment to more nature-positive futures. However, to date, there has been little mapping between the two.
Many of these indicators are closely aligned BUT there should be greater transparency on: how these indicators sit alongside one another, their applicability across and within different sectors, organisational types, entities of different sizes, and operations in different contexts.
This will inform the development of an SME Nature Positive toolkit being developed by the research team, which will be tested by SMEs and their financiers in 2024.
A Call to Action to Ensure Nature Positive Investment in the UK's SMEs
Professor Robyn Owen, MDX - Closing remarks – Roadmap for future SME Nature Positive Finance
Attendees supported Robyn's vision of a nature-positive for SMEs. MDX, IFB projects, SME innovators, SME supporters and those in the room and wider supporters can together enable this mission.
The government needs to favour less polluting alternatives e.g. in transport and logistics
Regulations are not harmonised – there is a role for research to inform this.
SME innovation is impressive but there are gaps between investment supply and demand - public policy can enable more integrated finance where departments come together to solve finance investor needs.
ALL FINANCE MUST BE GREEN AND ADVOCATE FOR THE GREENING OF SMES IN THEIR SUPPLY CHAIN - but so far this is only done by certain types of funders, this is only done by early-stage investors who are prepared to fund at risk. There is a need for investment and a road map for intermediate investment.
Our research questions
RQ1. What is the current understanding amongst SME investors regarding approaches to measuring and reporting on biodiversity?
RQ2. How do SME innovators who are developing new business models for nature positivity and net zero currently report on their impacts?
RQ3. How do SME innovators who are developing new business models for nature positivity and net zero currently report on their impacts?
RQ4. What are the effective ways to assist SME investors and investees seeking nature positivity and net-zero? How do investors collaborate to develop common approaches that reverse biodiversity depletion?
About the IFB Programme
This funding from Innovate UK is part of the Integrating Finance and Biodiversity for a Nature Positive Future programme, led by the Natural Environment Research Council. £7 million programme to develop the solutions needed to embed the values of biodiversity in financial decision-making.
There are also opportunities to access grants that support fintech SME solutions in biodiversity financing markets as part of the green economy transitions under the UKRI’s Unlocking Nature Positive Private Investment funding call.
Contact details
If you are interested in knowing more about the project or want to discuss ways the research team can work with your organisation in nature-positive SME financing solutions, please contact Robyn Owen (PI) r.owen@mdx.ac.uk or Amy Burnett a.burnett@mdx.ac.uk