Conservation Covenants in Biodiversity Net Gain

Using a Conservation Covenant to Achieve BNG

Under the UK planning system, almost every planning application must demonstrate measurable biodiversity gain under the statutory biodiversity net gain (BNG) rules.

Working through the planning process involves developers needing to avoid ecological damage, deliver enhancements on-site, or secure off-site gains.

As the habitat improvements need to persist for at least 30 years, local councils demand legal mechanisms to ensure long-term environmental management and guarantee that all created habitats are legally secured.

By choosing to enter into a conservation covenant, developers and planners can secure off-site BNG through established habitat banks, create and sell biodiversity units, and discharge any outstanding planning condition without project delays.

More than anything, conservation covenants offer a streamlined route to deliver measurable biodiversity and ecosystem services.

What is a Conservation Covenant?

A conservation covenant agreement is a private voluntary deed established under Part 7 of the Environment Act 2021.

Unlike standard private agreements that only bind the initial signing parties, legally binding agreements under this legislation create a permanent legal obligation tied directly to the land registry title.

The legal architecture ensures that all conservation commitments and conservation obligations automatically legally follow the title, binding future landowners, subsequent owners and any future land manager of the affected land.

Qualifying Land and Eligible Parties

To establish a covenant, both the landowner and an approved body need to agree to terms over the qualifying freehold land or eligible leasehold land.

The structure involves two parties:

1. A qualifying landowner who signs a voluntary agreement to protect the natural environment or preserve distinct features of the land.
2. A responsible body holding an existing statutory designation or formal designated responsible body status.

A local authority, wildlife charity or private sector organisation can apply to the Department for Environment, Food and Rural Affairs (DEFRA) to become a responsible body.

To qualify, it’s important that their main activities relate to conservation, nature or heritage, or their main purposes or functions relate to conservation.

As more responsible bodies receive approval, organisations such as wildlife trusts and other conservation charities step forward to enforce agreements across the country.

Core Obligations and the Legal Register

Every conservation covenant must clearly define the specific land involved and serve a specific purpose for nature or heritage conservation.

• Positive Obligations: Mandatory terms where the landowner agrees to take an active role in strategic land management to conserve habitat, manage land or maintain woodland, benefiting rare species as well as more common native bird species.
• Restrictive Obligations: Negative conservation covenants that prohibit harmful practices on the site, such as applying certain pesticides or altering natural drainage.
• Heritage Protections: Clauses that protect archaeological structures, sites of recognised heritage value or areas of archaeological, architectural, artistic, cultural or historic interest.

Conservation Covenant Setup

Once completed, the responsible body registers the deed with the appropriate local land charges register. The local land charges registrar then records it on the central conservation covenant register.

If an organisation continues to meet the statutory standards, it retains its ongoing enforcement role. If, however, DEFRA revokes an organisation’s designation because the entity no longer meets the statutory benchmarks, the conservation covenant ceases with that organisation, and the Secretary of State concludes the new responsible body in due course.

Difference Between Conservation Covenants and Section 106 Agreements

Understanding how responsible bodies operate compared to municipal planning officers helps you to choose the right legal tool to protect site biodiversity:

While section 106 agreements rely on the same method of local authority planning covenants to secure on-site mitigation, conservation covenants offer a far wider range of commercial flexibilities for proactive off-site habitat creation.

The Role of Conservation Covenants

Throughout the wider BNG system, conservation covenants play a crucial role.

With them, individual landowners can protect natural resources, enhance sites of special scientific interest (SSSI) and unlock private investment by generating high-integrity off-site biodiversity credits.

Conservation Covenant Process for Landowners and Developers

Setting up such covenants involves following published guidance and good practice guidelines from an early stage. The steps towards completing a conservation covenant are:

1. Ecological Baseline Assessment

An ecological consultant reviews the site using the statutory metric to calculate baseline values and identify opportunities for biodiversity enhancement.

2. Drafting Bespoke Agreements

The land manager outlines specific conservation objectives tailored to local ecology, such as planting trees to establish a woodland upstream to alleviate catchment flooding.

3. Due Diligence and Selection

The landowner considers other organisations to find an approved partner.

Both parties complete thorough due diligence checks as part of a comprehensive due diligence process to ensure that the partner holds the expertise needed.

4. Deed Execution

Legal teams draft the binding legal agreement, setting out the landowner’s obligations, reporting intervals and ancillary obligations, such as insurance and public indemnity.

5. National Registration

Once registered locally, the BNG site and the supporting biodiversity gain plan are submitted to Natural England to be recorded on the statutory gain site register.

6. Delivery and Ongoing Management

The landowner begins active habitat works, welcoming public access where compatible with long-term nature conservation targets.

Support from HMMPs

In order to make conservation covenants work in practice, the most suitable next step is to partner them with a habitat management and monitoring plan (HMMP).

The covenant itself establishes the legal framework, whereas the HMMP acts as the operational manual for setting out how the site will achieve a successful conservation outcome.

Using targeted interventions, it also sets out the step-by-step specifications for initial habitat creation and ongoing habitat enhancement to deliver lasting conservation benefits.

As a way of ensuring that the investments occur in the right place to restore fragmented wildlife corridors, an HMMP aligns with the local nature recovery strategies (LNRSs)

Based on structured regular monitoring in years 1, 2, 3, 5, 10, 20 and 30, ecological consultants will track the ecological gains, fulfil planning obligations, and provide information to the responsible body.

A habitat management and monitoring plan also offers contingency arrangements to handle unplanned changes, such as disease outbreaks or drought. For example, if one party fails to maintain habitats or if other parties breach the terms, the responsible body can use other powers to initiate formal enforcement measures or – as a last resort – enforcement action.

Cost and Funding

A financial strategy helps with securing land under the 30-year legal requirement.

The costs vary depending on site scale, and the full price includes baseline ecological surveys, legal fees, HMMP drafting and review fees charged by the parties involved.

Long-term habitat maintenance is often funded by selling generated BNG units to developers. The management capital is then deposited into an escrow account or dedicated sinking fund to guarantee long-term solvency.

Due to conservation covenants binding the land across generations, landowners should seek their own independent legal advice and consult a qualified financial adviser to work out the potential long-term implications and assess opportunities across emerging markets within the wider natural capital markets.

Expert Guidance from Our Ecology Team

Only with the right technical support from the start can you successfully secure a conservation covenant and guarantee the ongoing monitoring and management expected in future years.

If you need to deliver at least some mitigation within smaller areas on-site or establish strategic habitat banking across multiple sites, our specialist team offers the end-to-end expertise you need.

We work closely with landowners, developers and local planning authorities to ensure that all planning proposals align with relevant guidance and deliver measurable environmental outcomes.

By structuring agreements to guarantee that every intended conservation purpose is fulfilled, our team helps you to protect vital natural or heritage features that the public good agree are essential to conserve.

Contact Our Experienced Team

Our ecological consultants carry out baseline surveys, work out metric calculations and undertake statutory reporting to generate high-integrity off-site biodiversity units that satisfy the local authorities.

We cover all areas of biodiversity net gain, including authoring 30-year HMMPs featuring clear guidelines for long-term habitat maintenance and monitoring. With them, we can ensure smooth BNG delivery across the entire application process.

It could be that you’re a developer looking to discharge a pre-commencement planning condition or a landowner preparing to seek legal advice on habitat banking or wanting to register a site. Whatever the situation, Arbtech can help.

For further information on how we can support you or a free quote for services on your site, get in touch with our team via our website, phone or email, and we will cater to your needs without delay.