Natural Capital Thinking for Agri-Food and Hospitality Businesses

For food-adjacent industries, especially agri-food, processing, and hospitality; this shift towards prioritising natural capital is more than regulatory compliance. Land use, water availability, biodiversity loss, and climate resilience are material to operations and supply chains. At the same time, ESG-conscious buyers, financial institutions, and global reporting frameworks like Taskforce on Nature-related Financial Disclosures (TNFD) increasingly expect businesses to demonstrate alignment with environmental net gain principles.

Across the UK, policy and regulatory frameworks are rapidly evolving to embed natural capital into decision-making. DEFRA’s Biodiversity Net Gain (BNG) requirements, the Environment Act 2021, and updated guidance from the Department for Levelling Up, Housing and Communities (DLUHC) all point in one direction: businesses must account for the ecosystems they rely on and affect.

The question for senior leaders is no longer whether to consider ecosystem services, but how. That’s where Strategic Environmental Assessment (SEA) offers an underused but highly effective framework.

Sustainable Land and Resource Decisions

There are structures available to support businesses or project with natural capital integration by offering a method for:

• Mapping ecosystem services and dependencies:
  Pollinators, which directly affect crop yields and food quality. Carbon sequestration, which can reduce your net emissions and improve climate resilience. Water supply and quality, which are vital to everything from food production to hospitality operations.

• Identifying opportunities for Environmental Net Gain (ENG)
  Environmental Net Gain means going beyond simply minimising environmental harm to actively improving nature as a result of your operations. This could include:

-        Restoring native habitats around farms or facilities

-        Rewilding marginal land

-        Investing in regenerative farming practices

• Evaluating the long-term sustainability of sites and supply chain locations
  Assessing climate risk or ecological constraints, Environmental Net Gain means going beyond simply minimising environmental harm to actively improving nature as a result of your operations. This could include:

-        Analysing climate risk, such as flooding, drought, or heat stress that could affect crops, livestock, or infrastructure

-        Considering ecological constraints, like proximity to protected areas or declining soil health

-        Reviewing land use practices for resilience and regeneration potential

Using the likes of IEMA’s Strategic Environmental Assessment it is possible to highlight the importance of integrating the value of nature into economic decisions.

Actionable Recommendations

For organisations seeking to embed sustainability into operational and strategic decisions, the following steps offer a clear starting point:

• Baseline your ecological assets
  Use SEA to assess land and supply chain dependencies on soil quality, water availability, biodiversity, and other natural capital inputs. Build these dependencies into your risk register and procurement criteria.

• Incorporate Environmental Net Gain (ENG) and Biodiversity Net Gain (BNG) early
  Don’t wait for mandatory requirements. Use DEFRA’s ENG and BNG guidance to design projects that restore or enhance ecosystems. This can strengthen your social license to operate and reduce future compliance costs.

• Apply SEA to infrastructure and expansion plans
  Use SEA to guide the siting of new depots, processing facilities, or agritourism projects. Prioritise sites that avoid vulnerable ecosystems or flood-prone areas, reducing long-term operational and reputational risk.

• Align SEA with the SDGs
  Link SEA outputs to key sustainability goals, particularly SDG 6 (Clean Water and Sanitation), SDG 12 (Responsible Consumption and Production), and SDG 15 (Life on Land). This reinforces credibility in ESG reporting and strategy.

• Leverage digital tools for scenario planning
  Incorporate spatial data and GIS mapping into your SEA process. Tools that visualise ecosystem services or simulate land-use outcomes make assessments more repeatable and accessible.

• Build internal capacity
  Equip your sustainability, procurement, and estate teams with the knowledge to apply SEA concepts. Use IEMA’s SEA guidance and examples from Wales’ Well-being of Future Generations Act as models for integrated thinking.

From Environmental Risk to Strategic Resilience

Embedding SEA and natural capital thinking into business decisions is no longer niche or optional. It’s a route to building strategic resilience in the face of climate, biodiversity, and resource pressures. It aligns your operations with emerging regulation, global reporting expectations, and shifting market demands.

More importantly, it supports long-term, sustainable growth by ensuring land and resource decisions are not only economically viable, but also environmentally beneficial.

If you would like to know more about Strategic Environmental Assessments or any of the other ways in which ESG Made Easy could support your business in becoming more sustainable reach out to steph@esgmadeeasy.co.uk or connect with us on socials.