The National Infrastructure Commission’s 2024 Infrastructure Progress Review highlighted mixed results in the UK government’s infrastructure policies, stressing the need for robust plans to achieve net zero, regional growth, and environmental resilience. The report emphasised leveraging private sector innovation and financing to complement statutory efforts, proposing a diverse range of financial tools, including carbon credits and localised business financing.

Hosted by Stephen O’Malley, CEO here at Civic, the UKREiiF EcoBIDS roundtable gathered 20 delegates to address climate change, particularly flood risk management. Discussions centred on the Eco Business Improvement Districts (EcoBIDs) strategy, an innovative approach to funding climate resilience projects through localised, cross-borough collaborations defined by water catchment areas.

Key Discussions and Innovations:

1. EcoBIDs Strategy: A mechanism to pool funds from various stakeholders to finance integrated local projects, enhancing urban infrastructure for climate resilience and community wellbeing.

2. City Climate Bonds: Similar to existing BID programs, these bonds aim to secure funding for sustainable urban infrastructure, transforming cities with initiatives like converting tarmac to green spaces and rooftops to rain gardens.

3. Nature-Based Solutions: Implementing rain gardens, swales, and bioswales to mitigate flood risks and improve water management, with examples from London and Ealing.

4. Biodiversity Net Gain (BNG): BNG is a way of creating and improving natural habitats and makes sure development has a measurably positive impact (‘net gain’) on biodiversity, compared to what was there before development. In England, BNG is mandatory from 12 February 2024 under Schedule 7A of the Town and Country Planning Act 1990 (as inserted by Schedule 14 of the Environment Act 2021). Developers must deliver a BNG of 10%. This means a development will result in more or better quality natural habitat than there was before development. The Nature-based Solutions approach to Urban Infrastructure discussed in this session could be designed to provide a BNG accredited system that is delivered locally.

5. Localised Carbon Offsetting: Proposals for using local carbon offset payments to fund environmental initiatives within cities, promoting sustainable development and biodiversity.

6. Public-Private Partnerships: Emphasis on long-term collaboration between public entities and private investors to drive sustainable urban projects, with rotating ballots ensuring accountability and realtime impact.

• Alexa Culver, General Counsel, Environment Bank

• Andrew Cooper, Chief Executive, Leeds BID

• Carolin Göhler President, Landscape Institute

• Ed Britton, Director, Deloitte

• Emma Hatch, Head of ESG, Transport for London

• Jennifer Peters, Assistant Director Planning, Design and Sustainability, Ealing Council

• Lucy Lovatt, Head of Markets, Partners and Places, Homes England

• Lucy Wood, Director – Environmental Planning, Climate Solutions Leader UK&I, Stantec

• Lucas Lawrence, Director, Studio Egret West

• Mark Richardson, Head of Development Delivery Landsec U+I

• Matt Morgan, Director, Quality of Life Foundation

• Mike Rayyan, Strategic Relations Director, Zest

• Nic Durston, CEO, South Bank Employers Group (SBEG)

• Patrick Dumas, Founder & CEO at Square Mile Farms

• Rachael Sherratt, Sustainable Business Transformation Director, The Crown Estate

• Robert Hughes, CEO, Landscape Institute • Sarah Butler, Divisional Director, Drees & Sommer UK

• Stephen O’Malley, CEO, Civic

• Susan Aitken, Leader, Glasgow City Council

• Zo Hoida, Partner (Real Estate), Browne Jacobson

Themed Observations

Drawing salient points made by contributors around the table, themed observations include:

The Ecosystem at present:

Nic Durston, British BIDs: The BIDs model has evolved in the last 20 years. The vast majority of BIDs in the UK are occupier BIDs whereby the levy is paid by the occupier of the relevant hereditament. Any “eco-BID” would need to consider the interests of the voters and the levy payers.

Andrew Cooper, Leeds BID: There are 343 BIDs across the UK. In the last 20 years, they’ve invested £152 million into our town and city centres, which is a successful model. Some of those BIDs have an eco agenda and have grown in their success. The question is how can we flex that model to help us in terms of solving our issue? Swansea has set up a partnership all to do with their tidal energy and ecosystems and have started a model.They’ve come together to address wider investment without putting the onus on one party to solve the issue.

Where we place investment to build good case studies

Stephen O’Malley, Civic: In London, the threat to property in one borough is priced at about one and a half billion pounds of risk from flooding. Employing nature based solutions across our landscape such as rain gardens and swales and bioswales, which are low-tech in many respects, would mitigate and stave off the worst risks of that threat, but will cost about £1.2 billion, offering a notional retained value of £300m, what does the business model look like to deliver this type of infrastructure and harvest this monetised benefit.

Jennifer Peters, London Borough of Ealing: We’re doing something quite interesting by trying to develop a regional park. We’ve got a lot of golf courses and we’re looking at turning those into park lands, giving them SUDS and thinking about how that big space can deliver on all of these objectives as well as tapping into BNG.

Stephen O’Malley, Civic: Water quality and quantity are major issues. Who’s paying for it or investing for it? How does that money come back to those investors? And what does that look like? Some building owners are repurposing some of the basements for water storage and water attenuation in an attempt to try and mitigate the threat and risk of flooding to ensure the longevity and durability of those buildings.

Lucas Lawrence, Studio Egret West: Think about how perhaps 90% of our cities are not big regeneration schemes — they’re buildings or streets that we use every day and they’re difficult to manage. How do you get the regular funds that flow through and the carbon offset piece of our buildings, driven towards Net Zero? Many buildings aren’t Net Zero, even when made of timber. Perhaps localised carbon offsetting is a really interesting way of dealing with that. For example, a scheme like Mayfield, instead of paying a carbon offset sum out to an international scheme, can that be used to fund initiatives within policy and locally that maybe aren’t quite funded yet?

Mark Richardson, Landsec: For every tonne of carbon removal working towards targets, the cost is £628/tonne, yet developers can offset for £30/tonne. The idea of having local areas where we can do the carbon offset every time we design below 600 kilograms per metre squared, we could make better use of it for public investment such as biodiversity and creating swales. Investment for all

Emma Hatch, TfL: For investors thinking about their portfolio value, they’ve got to invest to protect it for the long term value. For that, there are a couple of examples of thinking about localised carbon offsetting, and the same could be said for Biodiversity Net Gain as well. What are the other existing funding sources? How could contributions from section 106 be better pooled at a local more local level, and given back with more autonomy to the local communities as to how they get spent?

Lucy Wood, Stantec: In the same way we have a strategic approach to Biodiversity Net Gain and Local Nature Recovery strategies, could we broaden this concept out to investments such as retrofitting streets, putting in SUDs, making the pedestrian-friendly —some of the alterations that happened during COVID. If you can focus on the economic and the social wellbeing aspects, then climate change looks after itself, because everybody sees the benefit.

Measuring value

Stephen O’Malley, Civic: There’s no shortage of money in the international money markets, so how might we package this up in a way for international investors, like pension funds, to help them see a way of putting the necessary £billions into the system? Then getting a fair return over the course of the next 10, 15 or 20 years.

Sarah Butler, Drees & Sommer: We should look at defining Return On Investment in the decarbonisation context. Something we’ve been grappling alongside local authorities is that in its purest sense, retrofit doesn’t stack up financially. From a financial perspective, we’re struggling to make progress, and we need to look at it from a wider economic-social sense in terms of benefits. Exploring questions such as ‘can we get people out of fuel poverty, what additional income does that bring to the area, will they spend more locally?’. We’re moving towards an economic view of how you assess return. If it’s just purely financial, it’s a challenge.

Alexa Culver, The Environment Bank: Whenever we’re looking at trying to make a unit of value of something, there’s going to be a huge amount of complexity there. It all relies on the fact that there is a market for these units and translating that into happier children or more types of time spent walking then on public transport. If there’s a way of accessing a social market or a nature market, where more money can be invested with a financial return that works, then mapping metrics and measurement is crucial. This then needs to be supported by a universal legislative backbone.

Mike Rayyan, Zest/Zouk Capital: As a former Inward Investment Manager, I think that the BNG piece is a really good example of where measures and methodology can help to enable markets and drive them forward, especially, for inward investments and FDI when we are looking at a particular region or the wider landscape for the UK.

Carolin Göhler, Landscape Institute: We’re not maximising the multifunctionality of green spaces in the urban realm. What we’re talking about is 10%, which is really difficult to achieve, but are we doing enough? As professionals, I think we need to aim higher.

Pushing policy

Stephen O’Malley, Civic: The EcoBID version also has the additional attractive quality, in that it needs to be re-balloted. What we’ve seen with some of these deals where you do ‘25 years and a day’ deals with the private sector, is a divergence between the economic interests of the provider relative to society’s interests in light of technological, political and climatic changes over the duration of these long term contracts.

Ed Britton, Deloitte: Where sustainability strategies are recommended, but not mandated by the city as guidance but not policy, things don’t happen. It needs to have a ‘hard’ regulating approach. Follow this, consistency is key. Rather than getting caught up in the inertia of the problems which are too big, we must identify the low-hanging fruit that will make a difference that is more affordable to developers, landowners and occupiers.

Robert Hughes, Landscape Institute: We’re starting to see now, during the tendering process, an emphasis on social value which we hope to influence at the early stages, before talking about commercial viability.

Mike Rayyan, Zest/Zouk Capital: Policy drives change – I think we need to consider speaking to the Cabinet Office to have any real impact. When I lobbied Central Government in 2019, with the Chamber of Commerce, for the now ‘Procurement Act 2023’ which has overhauled public procurement law in the UK and simplified processes so that it is more inclusive for SMEs, it had taken us almost five years with backing from Ministers for it to receive Royal Assent. It is only being enforced later this year in October 2024. We need to change the narrative and the way organisations see the issue at hand that we are discussing.

Taking a long view

Stephen O’Malley, Civic: How we identify and extract holistic value over time is not at all clear, what we’re talking about is a preventative measure, equivalent to some sort of insurance premium. With an EcoBID concept you’re paying for something that you’re trying to avoid and don’t want to experience ie typically flooding or excessive heat, although it’s clear that the experiential quality of the EcoBID infrastructure would be significantly better than our current system, which offers immediate, everyday betterment.

Mark Richardson, Landsec: And all of our mixed use schemes have a 15-25 year plus horizon, and we can’t do any of these schemes without partnership. The first of those partners is the public sector, working in harmony with these bodies is vital to the success of our projects and the value they can create.

Stephen O’Malley, Civic: How do developers in particular benefit from this systems thinking network and contribute to that as a sort of biodiversity net gain credit? If we design it properly, it could be a carbon offset scheme as well as a BNG accredited scheme, so you could start to see a multitude of layers to the commercial benefits and the practicalities of trying to deliver something of this type.

Mark Richardson, Landsec: Since 2017, construction costs have increased 99%, consulting costs by 12% and affordable housing percentages have increased by about 228%. For these things to work, without burdening the Internal Rate of Return which is the key to funding, we have to agree with our partners a market stimulation sum. The complexity around these sites, delivering regeneration at scale, is high and fair risk share is key. The schemes where we have seen this work are those where the Partnership is open and transparent about site abnormalities and constraints, listing out delivery parameters, such as affordability, carbon standards, quantity of open space, or whatever they may be, and run appraisals on this basis, leading to great examples such as Mayfield in Manchester. So for me, it’s all about partnership and taking the long term view.

Good for business

Stephen O’Malley, Civic: Neighbourhoods don’t exist in isolation, they’re part of a much wider system, such as river catchment systems, or social and commercial networks. The EcoBIDS idea is actually stretching out this relationship where the community, the wide range of stakeholders, businesses, visitors, all of these different agencies come together under a single banner and pay in some form to this entity.

Susan Aitkin, Glasgow City Council: The Avenues programme was looking at how we look at nature and people behaviour in our network of streets within the city centre. Especially observing how people move and linger within the core, and looking at how we use the public realm investment to shift the balance away from private cars and towards people walking and cycling. We’re now on site in a number of new streets in the city centre, and it is not without its challenges, not least a business response because it is disruptive —but there is no way around short term disruption. We find ourselves in economic territory that is seriously challenging for businesses, especially city centre traders, and the hospitality and retail sector in particular, which is an important and vital part of a city centre business community, recognising the critical role they play in the social fabric of the city.

Linda Thiel, White Arkitekter: One very different thing across Scandinavia is that it’s a pedestrian-first system. So as soon as you step out in the street, cars need to stop. It benefits local businesses, because streets are so much more pedestrian friendly.

Patrick Dumas, Square Mile Farms: What we do with City Planning and city design is focus on majoring on the experience: what we offer people back into the office (especially on harvest day) not only because it looks good, it smells good and it tastes good. When we think about placemaking, and particularly the built environment and the indoors, making sure that any investment is not just about it looking good, or looking a bit different than it needs to, but also being a place that people can genuinely engage in, and they can learn from.

Matthew Morgan, Quality of Life Foundation: Remember when we used to travel in cars without seatbelts? Do you remember when we used to go into pubs, and we would come out smelling of cigarettes? We drove change to make those improvements and now we don’t think about them, because they make sense. When you can provide the evidence about inequalities that exist you can show how one of the ways of addressing it is by giving greater access to green space. From there you can start to build a vision for that place; and if you can have the leadership to drive that through, then change is possible.

Conclusions and Next Steps 

The roundtable underscored the importance of systems thinking and innovative financing to address climate change and enhance urban resilience. Civic plans to convene further discussions and collaborate with interested parties to advance these initiatives.

Participants are encouraged to stay engaged through ongoing communication with Civic Engineers. For more information and updates, please contact Katrina at Civic Engineers (katrina@ civicengineers.com) or Dominique at South Facing (dominique@south-facing.info).

[Photo credit: Landscape Institute via LinkedIn]