Testing natural capital approaches in land-based businesses
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Since 2017 a number of organisations have been working to trial the Natural Capital Protocol and other natural capital approaches, for a variety of land-based businesses in Scotland. These trials have been pioneering projects within the UK, with some the first of their type anywhere in the world.
What is the Natural Capital Protocol?
The Natural Capital Protocol (NCP) aims to improve decision-making processes for businesses as they interact with nature. It provides a framework through which businesses can identify, measure, and value their impacts and dependencies on
natural capital, and integrate them into their business thinking.
The role of the Scottish Forum on Natural Capital
Many of the projects outlined below have been commonly grounded in, and coordinated through, the Scottish Forum on Natural Capital’s Sustainable Land Management Working Group, with support from SEPA and SNH. This group has provided a very useful forum for members to share ideas, best practice, and plan next steps. As well as public agencies, it includes members from local and Scottish government, land management and conservation NGOs, business organisations, and academia.
The initiatives are also very much down to the endeavors of individual members leading their own projects. Our shared overarching goal has been to build upon the NCP, and other approaches, to offer new and sustainable opportunities for land based businesses in Scotland.
Crown Estate Scotland – NCP Pilot
A pilot project was initially led by Crown Estate Scotland, (CES) in 2018 with three sites of focus – an upland estate at Glenlivet, the upland Ruthven farm, and Den Farm, a lowland arable farm in North East Scotland. Cumulus Consultants and Aecom were commissioned to conduct the trials, which was funded by CES, SNH and SEPA. This was the world's first ever trial of the NCP on a land-based business.
The trials were a success, with participating tenant farmers finding the Protocol useful in increasing their understanding of different types of natural capital on their farm, and how they impact upon their business. All participants felt the Protocol would benefit their businesses economic and environmental performance and resilience, and that it also helped to link-up existing tools, schemes and practices.
Tenant farmer Jim Simmons said: “The trial has been really useful in helping to increase my awareness of how our business may impact natural environment. It’ll help us to make more informed decisions about how to improve our farming operations going forward, both in economic and environmental terms.”
Read more about the pilot Crown Estate Scotland trial here
Crown Estate Scotland – Dairy trial and beyond
Following the success of the pilot, CES then extended the project to a fourth trial on a dairy farm on the Applegirth Estate in Dumfries and Galloway. In February 2020 they published their results, again produced by Aecom and Cumulus Consultants, which found the NCP to be directly applicable to the dairy farm business.
Some of the key findings included…
• Being able to demonstrate a link between agriculture and environmental benefits is an increasingly important for environmentally-conscious consumers.
• Participants were able to articulate what their natural capital ‘assets’ were, describe the business dependency on some of these assets, and how it impacts upon others.
• The trial also resulted in a set of recommendations outlining options to refine the protocol’s application to land based businesses.
Dairy farmer, David Taylor, said: “Through this trial I have become more aware of some of the knock-on effects of farm management and activities than I was in the past. In the future I hope to put this learning to use.”
In terms of next steps, CES are currently looking at translating the Protocol recommendations into manageable actions with individual farmers. They are also investigating the possibility of linking natural capital assessment into Integrated Land Management Plans (ILMP’s.)
A more detailed report on the CES study can be found here
Forestry management
This ongoing project has been developed by a sub-group of the Sustainable Land Management Group, led by Scottish Forestry and involving ConFor and woodland management businesses. It aims to examine the impacts and dependencies of woodland creation on natural capital. It is testing the use of the NCP Forest Sector Products Guide on a Tilhill Forestry managed site at Larriston, south Scotland. This is the first time this Guide has been trialed in the UK.
AECOM consultants are leading the work, and have already completed a scoping report setting out the boundaries of the analysis. Next steps will gather data, using primary data wherever possible, with workshops to be held with stakeholders (likely online) before the study concludes in May 2020.
Other natural capital approaches to land based businesses
Upland and moorland management
Discussions have been ongoing in the Sustainable Land Management group to evaluate natural capital approaches with land managers on upland moorland.
The Heather Trust and SNH decided in 2019 that rather than seek to run a NCP moorland trial, they would instead organise site-based events to share existing experience. The events will be for upland and moorland managers, and highlight the alternative incomes that can come from applying a natural capital management approach.
The first event, set to take place in April 2020, has been rescheduled to the Autumn, due to current Covid 19 restrictions.
Scottish Natural Heritage (SNH)
SNH have been sharing with the Group, their work to develop POBAS (Piloting an Outcomes Based Approach) which explores a payment by results approach to delivering agri-environment schemes on farms and crofts. Reporting to the Scottish Government, it is part of a broader ambition to pilot innovative environmental approaches on farmland and inform future farm support policies.
Phase 1 of the project included initial consultations and scenario planning with clusters of farmers in four pilot areas. A report on Phase 1 findings is expected by July 2020. (Covid 19 depending.)
Phase 2 will see the roll-out of the scheme, working with individual farmers to pay them for results.
Looking (further!) forward, SNH has also proposed to SG to incorporate natural capital elements into the pilots to test payments for wider public goods (and links to private markets and investment). Part of this would be to encourage a natural capital approach through applying a natural capital assessment tool, building on the experience with the NCP trials and other existing tools, with testing potentially on up to 100 farms involved in existing pilot clusters.
The James Hutton Institute 
The JHI have been trialing the NCP at Glensaugh, an upland sheep and beef-cattle farm, with associated crops for feed and forage. They have studied natural capital impacts and dependencies, and ecosystem services flow, with particular focus on livestock production, forestry, agroforestry and renewable energy.
They are currently working on two case studies,
Case study 1: Opportunity of woodland expansion to offset farming GHG emissions (forecasting time frame 2020-2080)
Case study 2: Opportunity of agroforestry expansion (in progress)
Scottish Land & Estates – Wildlife Estates Initiative
The Wildlife Estates Initiative are aiming to encourage natural capital accounting with different land agents (eg Savills) and their future work will be increasingly integrated with natural capital.
They are planning a number of walks and talks (now webinars) with relevant stakeholders, and aim to host Wildlife Estates plenary at beginning of September. Site visits also planned for Philiphaugh Estate and Torwoodlee Estate.
The Group has also been providing information for a Masters student from the University of Edinburgh who is reviewing natural capital approaches to land management.
Closing comments…
We hope that this brief summary of past, current and future activities has shown how much has been happening in Scotland to test new natural capital land management approaches.
The Sustainable Land Management Working Group will continue to help link-up these different projects, and raise awareness among practitioners, policy makers and beyond, about the important and innovative work our members do.
We will also continue to examine opportunities to extend use of the natural capital protocol where possible, and to explore other complementary and innovative approaches to sustainable land management across Scotland. We hope, in turn, to see many of these ideas built into land management and farming practices in the future, with benefits for Scotland’s society, economy and nature.
If you are interested in finding out more about any of these projects please contact Rory McLeod, Project Officer for the Scottish Forum on Natural Capital at rmcleod@scottishwildlifetrust.org.uk