Background to the report

Biological diversity, or biodiversity, is the variety of all life on Earth. It supports many of the things that people rely on, including food, water and medicine, as well as a stable climate and economic growth. In 2020, the Natural History Museum reported that Britain had lost a larger proportion of its natural biodiversity than almost anywhere else in western Europe, and the most of all G7 nations. 

Jump to downloads

The government’s Environmental Improvement Plan 2023 upgraded the 25 Year Environment Plan goal to make halting the decline in biodiversity and achieving thriving plants and wildlife its “apex” goal. It highlighted implementing statutory Biodiversity Net Gain (BNG) as one of the ways the government will “make further progress” against this goal.    

Statutory BNG, which the government brought into effect from February 2024, is unique to England. While there are examples of mandated BNG in states or regions elsewhere in the world, this is the first time a government has introduced it as a national legal requirement.   

Scope of the report 

This report examines the progress Defra and Natural England have made in implementing statutory BNG, and whether they have done so in a way that maximises benefits and effectively manages risks. We have produced it in response to a request from the Environmental Audit Committee to contribute to its inquiry into the role of natural capital in the green economy. It covers: 

  • Government’s approach to implementing statutory BNG, and how it expects the policy to contribute to its biodiversity objectives
  • How the government designed and launched statutory BNG 
  • Key risks the government will need to manage as it seeks to maximise the value statutory BNG can provide
  • Recommendations aimed at supporting Defra and Natural England to maximise value and manage risks to statutory BNG as policy implementation becomes business as usual 


In November 2021 Defra publicly committed to launch statutory BNG within two years. It worked quickly, developing a novel policy through an existing and complex planning system, and statutory BNG was launched in February 2024. However, in prioritising launching the policy it accepted some significant risks to effectiveness which it must now manage as the policy moves from implementation to business as usual.  

Defra launched its policy before having all the elements in place that it needs to ensure statutory BNG is a success in the long term. Although it considered that the arrangements it had in place at launch were sufficient, it has a long way to go before it can be confident that damage to biodiversity through development will not be understated and that the benefits of biodiversity enhancements will actually be delivered. For its market-led approach to work, Defra needs the market to scale up to meet demand, and for statutory biodiversity credits to deliver biodiversity when the market fails to do so.  

Local authorities manage many aspects of statutory BNG through the planning process, including ensuring compliance and enforcement. For now, there is doubt about whether local authorities will be able to discharge these duties effectively. In addition, it is not clear whether Defra will have sufficiently granular monitoring data to assess policy performance. Without these, Defra will not have assurance that its statutory BNG policy is delivering biodiversity outcomes and value for money for taxpayers. 


Publication details

Press release

View press release (17 May 2024)

Latest reports