📢 Announcement

Defining NFCA's Community Inclusion Standard

Simon Herko
Simon Herko
Dear member of the Scottish Nature Finance Pioneer's Community Benefits Network!

The Scope & Product Definition below is the output of an in-depth consensus building exercise, with our FIRNS project partners* to establish a UK-wide market infrastructure for certifying community participation processes for benefit realisation in natural capital projects.

This publication forms part of our commitment to an open and transparent process, acting as a definitive guide to our technical standard drafting group for our 'plug-in standard'.

Development of this 'plug-in standard' will include a closed consultation process with our FIRNS project partners*. If your organisation is not currently one of our partners, and you feel strongly your organisation would add value to this consultation process (taking place between now and 5th November), then please get in touch with
Simon Herko Simon
Herko (siho@iconic-blockchain.com).

By 5th November, our aim is to have an 'alpha' version, for trial audits with our partner case study projects. Feedback from these trial audits will allow the development of a 'beta' version, for public release by 31st March 2025.

* full project title: Community Benefits Certification Mark for UK Natural Capital Projects, made by the Nature Finance Certification Alliance (NFCA)
Project partners (funded and non-funded): CreditNature, Deciding Matters, Fife Coast and Countryside Trust (acting on behalf of the Nature Finance Certification Alliance), Foundation Scotland, Future Forest Company, Green Finance Institute, Highlands Rewilding, Kana, Nattergal, IUCN UK Peatland Programme’s Peatland Code, Realise Earth, Scottish Land Commission, Soil Association Certification Ltd, Soil Association Charity, SRUC, Wilder Carbon, Woodland Carbon Code, Trees for Life and University of Strathclyde.

Note: the key change of re-naming our project's market infrastructure product from 'Community Benefit Standard' to 'Community Inclusion Standard'. 

Community Inclusion Standard 

The contents of this post outlines the scope, purpose and definition of the Nature Finance Certification Alliance’s Community Inclusion Standard (NFCA-CIS) for application across the whole of the UK, for place-based natural capital credit schemes/codes.
 
The NFCA-CIS sits within one of four identified NFCA investment pillars https://www.natcert.earth/tag/investment-pillars/  
 
All IP pertaining to the NFCA-CIS is held by Fife Coast and Countryside Trust (FCCT) on behalf of the NFCA (an unincorporated membership organisation), with contributions from project partners, as defined as signatories to the project Memorandum of Understanding (MOU) gifted to FCCT.
 
Scope: the NFCA-CIS is:
 
  • A registered certification mark, IP retained by FCCT on behalf of the NFCA.
    • Licensed use of this certification mark by Project Developers following the best practice guide and by Projects claiming to be compliant with the plug-in standard (see below).
  • A UK-wide best practice guide, on ‘community inclusion for community benefit’
    • made publicly available on the NFCA website https://www.natcert.earth/tag/best-practice-guide/ - maintained by the NFCA as a live document, that can be updated in line with emerging developments to ensure community needs continue to be represented alongside nature market stakeholders
    • representing an authoritative UK-wide consensus of best practice on the topic
    • consensus to be evidenced by open signatured support from relevant organisations involved in the UK Nature Investment Market 
  • An open access 'plug-in standard', for validation and verification by authorised third parties
    • made publicly available on the open Kana UK Project Directory https://web.kana.earth/p/projects/ on behalf of the NFCA 
    • embedded into authorised natural capital methodology ‘codes and standards’ through a licensing arrangement for the NFCA-CIS certification mark
  • Plug-in Standard to involve a 3-tiered system, for:
    • Compliance with a Community Inclusion process, that can include the identification of hard-to-quantify social/community benefits 
    • Projects with measurable social benefits, that fall outside of the definition of community benefit (e.g. demonstrably wider impacts than on geographically defined local communities / benefits more firmly linked to communities of interest) 
    • Projects with measurable social and community benefits

Purpose: the NFCA-CIS is designed to:
 
  • Provide a clear definition of ‘Community Inclusion’ in the context of delivering UK natural capital projects.
  • Build on the Scottish Government definition of ‘Community Benefit’, and apply it to a UK-wide framework, as a voluntary component of the CIS.
  • Give confidence to investors and buyers of nature credits in investing in / purchasing credits from UK nature restoration projects.
  • Achieve, as far as is practical, and in co-ordination with the BSI, alignment on the topic of Stakeholder Integrity across all natural capital methodology ‘codes and standards’ operating in the UK.
  • Avoid, where practical, adding to the MRV cost burden of engaging with nature markets.
  • Identify, where practical, ways to reduce the MRV cost burden of engaging with nature markets through contracting with the community to undertake baseline/monitoring/reporting activities.
  • Set the qualifying standard to enable projects to receive public/philanthropic grants to cover all MRV costs from an identified set of supportive organisations
  • Clarify the linkages to evidence of community engagement/participation  through existing requirements from regulators, e.g. the Forestry Grant Scheme
  • Clarify the expectations on validation bodies in terms of their accreditation to the NFCA-CIS
  • Strengthen, not diminish, the viability of natural capital projects that deliver clear societal/public benefits through protecting nature and our environment - e.g. carbon, biodiversity, water quality, flood risk management, with clear linkages to social impact measures that buyers of ‘bundled’ nature credits (i.e. social + nature) are interested in reporting against.
  • Support a project’s alignment with the NFCA’s 4 Investment Pillars (as set out below), with the key focus on supporting Stakeholder Integrity
  • Ensuring our standard does not promote or advocate any form of community benefit that could be construed as a simple tax on the profits of a natural capital project, which might impact on its viability to deliver (non-financial) environmental and social value .
  • Provide transparency on decision-making processes linked to making trade-offs between different economic/social/community benefits, across different demographics, interest groups, geographies and timescales

Definition of Community

 
“A collective of people who are connected through a shared sense of identity, which is distinctive either in terms of: (a) place, such as a defined geographical boundary; and/or (b) practice, such as shared interests, motivations and values.”
 
Reference: Hannon, M., Gowens, R., Roberts, J.J, Major, L., Cairns, I. Community participation for community benefit from natural capital projects: A review for the Facility for Investment Ready Nature in Scotland (FIRNS) programme. University of Strathclyde, Glasgow. DOI: https://strathprints.strath.ac.uk/89185/ 
 

Definition of Community Inclusion

 
​​In natural capital projects, there are often communities of local landowners, tenants, residents and businesses who are connected to the area. In many cases, land is acquired for the purpose of raising funds through natural capital markets, but without the full support of relevant communities. Objections to the plans can be for a variety of reasons, including increasing house prices, local employment opportunities, and connection to landscapes. 
 
Projects lacking community inclusion may be stalled by local opposition and conflicts with regional and national policy priorities. This creates some risk for project funders, who may find the projects are likely to receive bad press and opposition. This risk can be mitigated by embedding community relationships building into projects, ideally from early development stages. 
 
A strong approach to Community Inclusion can enhance the reliability of the project to deliver a broader range of environmental and social impacts; improving the longevity and sustainability of the project. Depending on the scale of the project, such additional ‘co-benefits’ should be formally captured, measurable and form part of the monitoring, reporting and verification (MRV) for the project. 

Definition of Social Benefits


Community benefit is a contested term. In practitioner circles, it is often framed as an input (e.g. community payments), designed to fund interventions that benefit the community. 
 
We argue a more helpful framing is that of a social benefit, defined as a demonstrable uplift in the wellbeing of a community – either of place and/or practice. 
 
This uplift is associated with specific outcomes (e.g. prosperity, happiness, independence) that are umbilically linked to the delivery of specific outputs (e.g. education, community ownership, habitat restoration), which are the function of specific interventions, driven by a range of inputs (e.g. investment, time, political capital). 
 
Furthermore, social benefits may be:
  • primary i.e. associated with impacts directly linked to a project; or 
  • secondary i.e. associated with supplementary activities that are not core to that project’s work-plan.
Social benefits also need to be described in terms of their:
  • timing: when this benefit is first felt (e.g. soon, later) and 
  • longevity: how long it is felt for (e.g. short, medium or long-term).
 
Reference: Hannon, M., Gowens, R., Roberts, J.J, Major, L., Cairns, I. Community participation for community benefit from natural capital projects: A review for the Facility for Investment Ready Nature in Scotland (FIRNS) programme. University of Strathclyde, Glasgow. DOI: https://strathprints.strath.ac.uk/89185/ 
 
Note – to ensure alignment with Scottish Government definitions of Community Benefit, we have used the University of Strathclyde source material to define social benefits, rather than community benefits. Community benefits are subsequently defined as a strict sub-set of social benefits. 
 

Definition of Community Benefits 

 
Naturally - like the term community – what is considered a community benefit is deeply subjective, meaning that two communities may share different views on how beneficial the impacts of a specific project may be. 
 
To understand what a community may consider beneficial, it is essential that project developers formulate a deep understanding of the community’s resources, values, priorities and histories. 
 
It is also essential that developers are sensitive to the evolving nature of these characteristics and to the fact that a community’s perspective on what is beneficial can shift with time.
 
Reference: Hannon, M., Gowens, R., Roberts, J.J, Major, L., Cairns, I. Community participation for community benefit from natural capital projects: A review for the Facility for Investment Ready Nature in Scotland (FIRNS) programme. University of Strathclyde, Glasgow. DOI: https://strathprints.strath.ac.uk/89185/ 
 
For defining ‘community benefits’, the definition of ‘community’ is constrained to a community of geography, with ‘communities of interest’ within the relevant geography included. 
 
Within the NFCA-CIS, wider definitions of communities, including Communities of Interest that are not explicitly tied to the geography of the project, are referenced as part of the broader stakeholder mix that would be engaged alongside communities of geography, as per the best practice guide.
 
For the NFCA-CIS, we are committed to close alignment with the definition of Community Benefits developed by the Scottish Government:
 
  • They consist of meaningful social and economic benefits that promote the sustainable development of communities: 
    • Community benefits are the intentional social, cultural and economic benefits from natural capital that are designed into an arrangement/initiative with the local community on a negotiated basis for their lasting well-being. 
    • They are more substantial than one-off activities or maintaining existing uses and access. 
    • They should be delivered in a way that is proportionate to the scale and impact of the landholding or activity, but without unduly compromising the practical or commercial viability of the landholding or activity. 
    • Community benefits are distinct from public benefits, which have a national impact and benefit the wider public, like clean air, biodiversity, and carbon sequestration. 
  • They are specifically for the local geographic community, the boundaries of which are determined by stakeholders themselves on a case by case basis informed by the context of each project:
    • Community benefits are primarily for the community that lives on and/or near to a landholding that has an impact on local resources and/or on the community itself. 
    • Community benefits can take various forms, such as provision of land for affordable housing or crofts, supporting local businesses, offering training and education opportunities, recreational and community facilities, offering land for community use, increasing fair work opportunities, and contributing to climate change adaptation. 
    • They are not benefits that are solely received by communities of interest (e.g. mountain biking or bird watching), although communities of interest may benefit in addition to the local community (e.g. from improved access and facilities). 
  • They require meaningful participation of the community and should align with local strategic plans where available: 
    • Community benefits should be established with intent and in addition to the ways in which ‘business as usual’ brings benefits for the local community. 
    • They are long-term commitments that bring meaningful benefits for the local community and support community agency. 
  • They are tailored to the community’s needs: 
    • Community benefits are long-term commitments meant to support the sustainable development of a community. 
    • Over time, the circumstances and needs of all parties will change and agreements should offer enough flexibility to accommodate this, whilst maintaining a long-term commitment to community benefits. 
  • They should be monitored and reported on publicly: 
    • The scale and impact of a landholding and how that landholding is used determine the proportion of these benefits
    • Community benefit packages are voluntary and not meant to compensate for any impacts on communities or other stakeholders.
It’s important to note that there is no one-size-fits-all approach to community benefits; the right approach should be customised to the community’s unique circumstances, needs, and desires. 
 
Effective approaches to community benefits start with open and early participation of the community to understand their needs and aspirations. This engagement helps identify opportunities and reduce potential conflicts over projects, benefiting all parties.
 
For translating our definition of Community Benefits into an auditable technical standard, we have identified 4 measurable components to assess a project’s alignment with the third tier of the Community Inclusion Standard - i.e. projects with measurable community benefit:
 
  1. Community Participation - i.e. activity that is mutually beneficial to landowners and managers (who are part of the community) and the rest of the local community. Such that each party has an opportunity to understand what and why things are happening and understand valid opportunities to participate. 
  2. Direct Community Benefit - e.g. provision of land for affordable housing or crofts, supporting local businesses, offering training and education opportunities, recreational and community facilities, offering land for community use, increasing fair work opportunities, improved access to nature, green-health partnerships and contributing to climate change adaptation. 
  3. Indirect Community Benefit - e.g. Utilisation of local contractors and services when they are available i.e. facilitating local employment. This could include payments made to the community to support project delivery, maintenance and monitoring/reporting. 
  4. Direct Financial Community Benefit* - e.g. It can be appropriate for community benefits to include payments or donations made to the community – for example, in the form of a community benefit fund paid annually or in a lump sum. This income can be used in a variety of ways to empower communities and support their economic and social development. When a landholding is generating a financial return from natural resources, as in the case of renewables or carbon credits, a project could consider how the local community shares in those financial benefits. 
 * The practicality of this final option will naturally relate to:
  • the relationship between the anticipated financial return and which parties are taking on the financial risk to realise such returns.
  • matching of cash flows - e.g. the timing of the financial returns (often a long time in the future for carbon credits) compared to when financial support is required for the communities.