Project Summary

In early 2023, Surrey Wildlife Trust successfully completed its first sale of Biodiversity Net Gain units to Shepperton Studios – in relation to their studio expansion, for a deal value of c.£1m. This agreement is a forerunner of the Biodiversity Net Gain (BNG) process due to become a requirement under the Environment Act 2021 in November 2023.

The deal also marks a significant step for Surrey Wildlife Trust’s broader plans for its Natural Capital Investment Company – A habitat bank project development vehicle to create, finance and deliver not only Biodiversity Net Gain projects but also other nature investment opportunities at scale to achieve nature recovery across Surrey.

Milestone 1: Initial Project Scoping

Often the initial task is to understand the site(s) you want to use and the land use change needed for nature restoration or creation. This includes considering the goals of the land managers involved, the vision within the wider catchment or neighbouring area, and whether there are permits or planning consent needed for any proposed changes.

At this stage, you can also conduct a high-level assessment to determine which revenue streams can be generated from ecosystem services , e.g. carbon credits, flood reduction cost savings, or biodiversity units, which will be crucial for identifying buyer interest.

Finally, it is useful to have an idea of the costs of the project and potential grant funding that may be available to support initial development.

Milestone 2: Identify and Work with Sellers

Initial ownership of the ecosystem services will belong to the landowners or, in some cases, the tenants of the sites that the project is using. However, these can be passed onto others, such as third-party project developers, with appropriate legal arrangements and compensation. In some cases, there may be a sole seller of the ecosystem services, where the site or landholding is large enough that it delivers the volume of ecosystem services needed to cover the costs of the project and attract buyers.

However, in order to achieve scale and impact, a project will likely involve multiple sellers, such as neighbouring farmers and estate managers. Scale of land is often needed to deliver significant environmental outcomes, and also to attract private finance. Project developers must plan how they initially contact and engage with these sellers going forward, building their wants and needs into the project.

Milestone 3: Baseline and Estimate Ecosystem Services

At this point, you will have understood the vision for the project and identified a particular ecosystem service or set of services to be sold. The next step will be to carry out detailed analysis – baselining each ecosystem service and quantifying what will be able to be delivered from the interventions, as well as planning how to monitor and maintain these interventions. You will need to rely heavily on ecological expertise for this more scientific Milestone.

At this step, standards, verification and accreditation methods will be considered in more depth.

Milestone 4: Identify and Work with Buyers

Based on your earlier market analysis in initial project scoping, you will have identified one or more groups of beneficiaries who may be willing to ‘buy’ or pay for the ecosystem service(s) to be created, restored or maintained. Buyers vary – as do their requirements – but at this step, greater buyer engagement is now needed to develop a deal that channels money towards the nature-positive outcomes that your project wants to deliver.



Milestone 5: Develop Business Case and Financial Model

You’ll have started building your business case and financial model in earlier steps – laying out your project’s vision, the market proposition and estimating costs and income. This step offers a review, in addition to providing details needed to build out the financial model and business case more fully. Both of these key documents will be iterated throughout project development, and will likely be altered during project delivery as new information emerges. These documents are interlinked and, if developed correctly, will ensure your project’s viability and help you with discussions with stakeholders – including sellers, buyers and future investors.

The financial model will also enable you to better understand the type of structure your project may take to attract investment (i.e.a loan, an equity investment, a bond) and what sort of returns you can afford to pay/offer.

Milestone 6: Develop a Governance Structure

A governance structure will inform the way in which the project is run when fully operational and for what purpose. It identifies appropriate decision making processes, who is responsible for what actions, and what controls are in place to make sure that the project is meeting its stated goals, all while abiding by the risk appetite of its engaged stakeholders. The legal entity to host the project will be a key driver in this, and the appropriate choice of entity will be dependent on several factors that are outlined below.

Your governance structure should align with and underpin your business case, as a necessary component of how the project will deliver its environmental outcomes and other strategic targets.

Milestone 7: Identify and Work with Investors

It is important to note that not all projects will need up-front investment, but for those that do, this section provides a framework for thinking around the development of the investment model. This does not constitute financial advice – as the GFI is not licensed to do so. However these considerations are based on the insight offered by project developers and other market stakeholders.

An investor will be a new core stakeholder in your project, and it’s just as important to think of what you require from investors, as much as what they require from you – so that you can build a positive and collaborative relationship with them.

This entails defining the investment ask (in line with the financial model), the strategy for approaching the right investors, and the negotiation of terms that can then be formalised in contract development (Milestone 8).


Milestone 8: Establish Legal Contracts and Closing

When all relevant stakeholders have been engaged and their terms of engagement are clarified as much as possible, this is the time to develop the legal contracts and close the deal. This stage is last because legal fees are expensive, and it is generally advised to determine as much as possible in previous stages before starting to draw up contracts in earnest.

Note: The information in this Milestone does not constitute any form of legal advice but instead serves as practical advice on how to manage engagement with lawyers and the process of contract development.

The Green Finance Institute is not a firm of solicitors or connected in any way with the courts. The information and opinions we provide in this section and across the Toolkit do not address your individual requirements and are for informational purposes only. They do not constitute any form of legal advice. We recommend that appropriate legal advice should be taken from a qualified solicitor before taking or refraining from taking any action.

Community Engagement

Community engagement is highly advisable for any project that aims to sell ecosystem services, to ensure fair outcomes for local communities and the long-term success of the project. Project developers can build connections with local stakeholder groups early on to spot both risks and opportunities.

Policy and Regulation

Project developers and enterprises will need to keep a continuous check on how current and future policy may affect the project, and also opportunities for the project to inform policy. The role of private finance for nature across the UK is being encouraged by the UK government and its devolved administrations, and new rules, standards and markets are being developed.



With many thanks for giving their time and insight to this case study:


Sarah Jane Chimbwandira, Chief Executive Officer

Leigh Thornton, Business and Biodiversity Manager

Home | Surrey Wildlife Trust

Matthew Wright, Head of Planning and Technical Development

Rosie Moutrie, Senior Communications & Social Media Manager




Date published: 14/07/2023

Next Milestone

Approach to BNG

Surrey Wildlife Trust (SWT) is supportive of the upcoming BNG compliance market as a method of delivering nature restoration and its ’30 by 30’ target – 30% of land and sea cover preserved by 2030. Most of the UK’s Wildlife Trusts are similarly in agreement, but at the time of writing, each Wildlife Trust is tasked with determining its own BNG sales strategy and engagement of buyers.

From 2020, SWT was interested in testing its overall approach to BNG. It also worked with three other Wildlife Trusts and Finance Earth, which were developing a separate Habitat Banking Investment Model. Both SWT and this group were part of the Round One of NEIRF, and shared their findings through their projects’ development.

Through 2020/21, SWT analysed its existing landholdings and scoped the potential for BNG projects. It identified a total of 12 sites that would generate up to 240 ‘pre-implementation’ units that would be immediately available for sale, via the BNG 3.0 metric. Leigh Thornton, Business and Biodiversity Manager at SWT, says this offering was important to have knowledge of, both strategically for the Trust and also as a potential roster of options for property developers to consider.

SWT considered what qualities and requirements it would ask of its BNG buyers and decided early on to impose a 20% requirement of BNG of the property developers, rather than the mandatory 10%. This 20% figure is being supported by Surrey Nature Partnership and already adopted by 2 Surrey LPAs. It also wanted to work with developments that were actively trying to deliver biodiversity onsite, rather than resorting to offsite BNG units completely. Thornton said this was important to the Trust in preserving the integrity of any deals.


Finding Potential Buyers

To find potential buyers, SWT used existing channels and connections that it had with the property developer community to create an in-bound pipeline of interest.

Firstly, SWT has an ecological consultancy arm – Surrey Wildlife Trust Ecology Services (‘Ecological Services’) – that provides ecological advice and recommendations to local and national property developers, among others. Such property developers were enquiring about the number of offsite BNG units they would be required to purchase, and what vendors were available to sell to them. The consultancy often recommended enquiring with the Trust itself, and Thornton comments that most of its in-bound enquiries came from this source.

Secondly, SWT is also linked to the Ecology Planning and Advisory Services (EPAS), which is a standalone body that gives impartial advice to Local Planning Authorities (LPAs) – 11 within its boundary – on ecological aspects of planning applications. Ahead of BNG being formally enforced in November 2023, many of these LPAs have been requiring certain developments to purchase BNG units; using the BNG methodology but under the preceding S106 agreement structure that also gives LPAs a right to require the developer to participate in mitigation schemes for any nature impacts (see Ashill Habitat Bank case study for another example of this). Through this work, the LPAs were similarly made aware that SWT was considering selling BNG units and therefore several developer enquiries to SWT.

Overall, Thornton comments that a key factor in generating this pipeline of interest was the excellent reputation that SWT had built over the years in creating and maintaining high-quality habitats, which was promoted by its partners such as the LPAs and Ecological Services. As this was an unestablished market with a high degree of uncertainty and a lack of sellers, this attracted several developers to contact SWT in 2021/22.


Initial Engagement

Thornton comments that it is ideal for BNG vendors to develop a ‘triage’ system that helps to sift through non-valid enquiries quickly and that, at the time of writing, SWT is developing a strategy for this. A number of developers initially emailed SWT but disclosing the 20% BNG requirement stopped a few of them from taking negotiations further. However, around a dozen or so were undeterred.

One of such developers was Shepperton Studios, a film studio located in Shepperton, Surrey, England. It contacted SWT in May 2022 with an enquiry for BNG units to support a planning application which formed part of Shepperton Studios’ one million square foot expansion. After consulting with Ecological Services and the LPA (Spelthorne Borough), Shepperton Studios identified a need for 36 BNG units.

SWT approved of Shepperton’s approach to developing the land. Plans include planting over 30,000 new trees and shrubs, new water bodies, the creation of new wildflower and woodland habitats and a £1m investment in the River Ash Corridor that runs through the site, to enhance biodiversity and improve public access. A net gain in biodiversity had already been achieved across most of the site, but additional land was required offsite to meet Shepperton Studio’s own aspirations. SWT also noted very limited objections from the local community over this development, which helped to minimise reputational risk.

Within its landholding, SWT identified Manor Farm for a deal with Shepperton Studios. The Manor Farm site is a grazing pasture that is used for Belted Galloway cows and is six miles from Shepperton Studios. It is capable of generating up to 100 BNG pre-implementation units, the majority of SWT’s overall BNG potential, in converting to a species rich meadow habitat.

The distance from the Studio site meant that some additional units were required, due to the spatial multipliers in the DEFRA Metric, but Shepperton Studios was happy to proceed with the deal. Thornton comments that in future, it may be necessary to ‘mix and match’ units from different sites to accommodate buyer needs, based on distance and quantity.


Pricing and Reporting Negotiations

SWT prepared for pricing discussions with a view of the minimum amount it would need to sustain the habitat over 30 years, having developed its costings in line with those of the Wildlife Trusts Habitat Banking Investment Model. It also had price ranges from eftec’s BNG Market Analysis – between £11,000 and £25,000 –  and had informally gathered pricing data on a few previous BNG deals across England.

Thornton notes that actual conversations were smoother than anticipated. Shepperton Studios accepted SWT’s offer and were in agreement of the value in light of SWT’s track record, reputation with Spelthorne Borough Council and the lack of units in the market. This was partly due to the need for securing a net gain not yet being a legal requirement, and the objective of achieving a 20% BNG being a goal of Shepperton Studios, rather than being prescribed under planning policy

Shepperton initially proposed the idea of staging payments every five years across the 30-year period, but SWT were not comfortable accepting this due to the up-front costs of the habitat establishment and the financial risk associated with staging payments. SWT reasoned that as the purchase of the BNG units would allow Shepperton to proceed with its immediate development plans and the delivery risk sat with SWT, the full amount should be paid up front. Shepperton agreed to this rationale.

However, Thornton notes there were more extensive negotiations around the reporting requirements. Shepperton Studios originally wanted a detailed report of the habitat every year and full accounting of where the BNG payments were being spent. Thornton comments this is more akin to the reporting requirements of a traditional grant. Ultimately, an agreement was reached where SWT would produce a higher-level report every year and a full report every five years with ecological surveys.



Once these terms were agreed, SWT produced a Letter of Intent that indicated its willingness to sell Shepperton Studios the required BNG units. This Letter included the number of units, the unit price and the timing of payment, among other high-level details.

This was  used  to develop a S106 agreement, which included the BNG purchase as a stipulation of its overall planning permission. The S106 agreement adopted what was then known about the upcoming compliance requirement – the BNG methodology, processes and definitions – to create what Thornton calls a ‘hybrid’ legal agreement between the traditional S106 format and the upcoming conservation covenants that would be used for BNG, once enforced from November 2023.

Separate to this agreement, SWT and Shepperton developed a ‘Biodiversity Land Agreement’ that they signed in tandem to the S106 contract. This likewise set out details of the BNG transaction, but also included things such as SWT’s delivery and maintenance liabilities, its reporting requirements, marketing and comms processes, and considerations around force majeure. The latter took some time to determine, as the Manor Farm site is located on a flood plan.

It took around nine months from initial engagement to complete the deal.


Ongoing Engagement

Overall, both Shepperton Studios and SWT were keen to develop an ongoing collaborative relationship.

For example, on top of the BNG agreement, Shepperton Studios also donated £50,000 to SWT’s educational work – specifically its Wilder Schools programme. Surrey Wildlife Trust have invited Shepperton Studios to a number of its events in 2023 and plans to offer site visits and volunteer days to its employees.

For marketing and communications around the agreement, all public facing materials were drafted with both organisations’ relevant teams, including the joint press release. Thornton and Matthew Wright, Shepperton Studios’ Head of Planning and Technical Development, also spoke on BBC Surrey Radio when the agreement was announced.

Going forward, Thornton says that they hope to build this relationship and seek other mutually beneficial agreements.


Lessons Learned

Reflecting on the overall journey, Thornton and the SWT team offer lessons learned for other project developers engaging buyers:

  • It is important to be clear about the mutual aims of the project, what motivates both sides and what are the ‘deal breakers’, such as SWT’s 20% requirement, which may waste both parties’ time and resources if not disclosed early on.
  • Establish early on that this is a market led transaction, and not a grant.
  • Be clear that the main obligation of the landowner is to deliver the habitat improvement, and that the only accountability is around delivery of the Conservation agreement, not itemised expenditure.
  • Sites can deliver varying amounts of BNG Units, depending on the type of habitat chosen, but with differing risks of delivery. Landowners should decide early on what habitat they are aiming for.