Finsilva is selling and S Group is buying nature values in Pielavesi

The pilot project on nature values trading will restore a mire of about 12 hectares in Pielavesi, North Savo. The mire is a barren area with poor tree growth that was drained in the 1960s. In the restoration project, ditches will be blocked and trees removed.

“This is the first genuine nature values sale for us, where nature value hectares verified by an authority are being sold,” says Juha Hakkarainen, Managing Director of the forest and natural capital company Finsilva.

Market-driven means to finance actions to improve state of nature 

Nature value hectare is the unit used to measure restoration. Finsilva as the owner of the area is selling nature value hectares and S Group is buying them. The pilot project is coordinated by Tapio Palvelut Ltd. One hectare of a habitat type that is in its natural state corresponds to one nature value hectare. Several hectares to be restored are needed to produce one “additional” nature value hectare.

According to Hakkarainen, in the project the state of nature is improved and nature values produced based on the principle of “additionality”, which means that just offsetting nature values weakened elsewhere is not enough. He believes that suitable sites for nature values trading can be found in the possession of both Finsilva and other landowners.

“Nature values trading provides a new means for forest owners to generate earnings that enables to combine environmental and economic objectives. This is a good example of a model that does not depend on how much forest one owns. A site suitable for nature values trading can well be found in a small forest estate.” 
More funding is needed to maintain and improve the biodiversity of forest nature. The state’s funds alone are not enough to prevent biodiversity loss or reach the targets set in the Nature Restoration Regulation. This is why market-driven models based on private funding are also needed. 

First purchase of nature values by S Group

The businesses must also take action to strengthen biodiversity. For S Group, the purchase of nature values in Pielavesi was the first one of its kind. In practice, the buyer purchases nature values that have been produced and are measured by nature value hectares. Besides the benefit to nature, the company may also benefit through a stronger business brand or sustainability reporting.

“We will actively look for best practices and bring the businesses’ perspective to the creation of a voluntary nature values market. The fight against biodiversity loss requires all stakeholders to participate,” Senior Vice President for Sustainability Nina Elomaa says.

The parties agreed to keep the price negotiated for the nature value hectares as a trade secret, but it is based on alternatives uses, i.e. loss of income that would be generated from commercial use. Besides this, the buyer pays all restoration and planning costs.

“Based on the results of the pilot project, we will assess what the new legislation means for different stakeholders. We will test the functioning of the process to produce nature values, the costs involved, the time consumed and the role of agents,” Director of Development and Sustainability of Tapio Hanna-Leena Tevä says. 

Halting biodiversity loss requires commitment from society as a whole. In our series of articles, we present the nature values market and cases where ecological compensation has been used from the perspective of different stakeholders. Through ecological compensation, adverse impacts on biodiversity caused by human action in a certain area are offset by enhancing biodiversity in another area. Nature values market is a new and evolving means for channelling private funding to the work for biodiversity.
 
Text: Sirpa Mustonen
Photo: Selma Salin I TAPIO