Business plan 2022-23
From how we work to how we play, Covid-19 has accelerated changes in the way we live our everyday lives that would have been unimaginable at the start of 2020.
Yet as Wales embarks on the road to recovery from the pandemic, businesses across the country are looking to capitalise on the opportunities to take a greener and more sustainable approach to their commercial activities.
NRW is perfectly placed to play a key role in the Welsh Government’s efforts to rebuild Wales’ post-Covid-19 economy, as we work across society to maximise our contribution to the national mission to create a more prosperous, green and equal future for the nation.
Taking a greener and sustainable approach to commercial activities can help us do more for the environment, people and economy of Wales for generations to come. Our vision to generate income for NRW through sustainable commercial activity, so that we can do more for Wales’ environmental, social, economic and cultural well-being, is at the heart of our ambition.
We have a duty to ensure that all our commercial activity is underpinned by our organisational values and our obligation to ensure the sustainable management of natural resources, as well as our broader responsibility to Wales’ well-being goals.
Set against the backdrop of EU exit and the ongoing climate and nature emergencies, the road to recovery offers challenges and opportunities that we must navigate successfully if we are to meet our commitment to future generations.
Now is the time to think and act differently. We must seize the opportunities and innovation emerging from our new normal, to work collaboratively to develop a uniquely Welsh approach to the nation’s ambition for a truly circular economy.
Underpinned by our mission to deliver benefits for the planet, people and prosperity, NRW will be ambitious in our approach to our commercial activity in the future, exploring opportunities to work with new and existing partners. We are committed to being braver in our exploration of new markets, networks and developments.
This strategy supersedes our previous Enterprise Plan and outlines a high-level view of our ambition and priorities. We look forward to working with you to maximise the value of our natural resources, to benefit people and the economy, as well as the environment, for this generation and the next.
Director of Communications, Customer and Commercial
This strategy sets out our approach to maximising revenue alongside our prioritisation of ‘Planet’ and ‘People’ through more commercial activity.
We are already managing commercial activities in the context of NRW’s Well-being Objectives and within the remit to deliver against the Sustainable Management of Natural Resources (SMNR) principles.
But our aspirations are to do more, to be better, and to ensure Wales is at the forefront of tackling the nature and climate emergencies. While we do not aspire to be commercial simply for the sake of being commercial, our strategy is ambitious and does not shy away from big ideas and principles.
We recognise that we have an important role to play in Wales’ green economic recovery from the Covid-19 pandemic and believe that sustainable development and supporting a circular economy is key to Wales’ recovery and future prosperity.
NRW faces pressures from increasing demands on our services, further constraints on our resources and therefore an increasing need to generate our own revenue.
With the right mechanisms and if our ability to retain income is permitted, commercial activity can help to alleviate reliance on Grant in Aid funding, allowing us to do more for the environment and the people of Wales.
This Commercial Strategy provides a new framework around long-term objectives and aspirations across the NRW portfolio. It is a living and breathing document, updated annually to ensure that the framework is agile and can evolve to align with current policy and legislation and an ever-changing commercial environment. It is supported by more detailed, sector-specific plans, that are better placed to consider industry-specific requirements and more immediate commercial considerations.
Feedback from our stakeholders and partners has highlighted a general consensus on what they would like to see from NRW’s commercial activity in the next five years and we have taken this on board in our strategic approach:
So, as the context in which we operate changes and industry and external markets evolve, so too will this plan, taking into account the evidence base and by actively listening to our colleagues and our wider stakeholders.
As this strategy was being developed, Wales and the rest of the world was hit by the Covid-19 pandemic. The ultimate impact of this disease on the economy is yet to be fully determined and it will certainly impact different industries in different ways. NRW is committed to working smarter so that we can engage and contribute to the Welsh economy and focus on a green recovery. We also need to ensure that we are building resilience in our offering and markets, so that we can mitigate against future stresses to the economy.
The UK’s exit from the European Union is likely to present both challenges and opportunities for commercial development in Wales. At the time of writing, it is still not clear how it will impact the services that NRW provides. It is possible that we will not know the full impact for several years. We believe that the best response is to continue with our core business and to not hold back on new developments or partnerships. NRW believes this to be a positive message for Wales and its businesses, many of whom in some industries are heavily dependent on the local supply chain. We will continue to monitor the situation and will continue to take guidance from the UK and Welsh Governments on the issue.
Our vision and values are at the heart of who we are as an organisation and how we deliver our objectives. They outline what is important to us and the standards we live by.
Our vision is to ensure that the environment and natural resources of Wales are sustainably maintained, sustainably enhanced and sustainably used, now and in the future
Our #TeamNRW values are:
Underpinning all our work are seven well-being objectives.
NRW has a very diverse and wide remit of responsibilities. Our commercial activity must work alongside these responsibilities, complementing and supporting our overall objectives and working in partnership across the organisation.
Our different roles can be described as:
Adviser: principal adviser to Welsh Government, and adviser to industry and the wider public and voluntary sector, and communicator about issues relating to the environment and its natural resources
Regulator: protecting people and the environment including marine, forest and waste industries, and prosecuting those who breach the regulations that we are responsible for
Designator: for Sites of Special Scientific Interest – areas of particular value for their wildlife or geology, Areas of Outstanding Natural Beauty (AONBs), and National Parks, as well as declaring National Nature Reserves
Responder: to some 9,000 reported environmental incidents a year as a Category 1 emergency responder
Statutory consultee: to some 9,000 planning applications a year
Manager/Operator: managing seven per cent of Wales’ land area including woodlands, National Nature Reserves, water and flood defences, and operating our visitor centres, recreation facilities, hatcheries and a laboratory
Partner, Educator and Enabler: key collaborator with the public, private and voluntary sectors, providing grant aid, and helping a wide range of people use the environment as a learning resource; acting as a catalyst for others’ work
Evidence gatherer: monitoring our environment, commissioning and undertaking research, developing our knowledge, and being a public records body
Employer: of almost 1,900 staff, as well as supporting other employment through contract work
NRW’s core purpose is to pursue the sustainable management of natural resources and meet our statutory duties in the exercise of our functions.
All NRW commercial activities must comply with applicable UK and EU laws and regulations, Welsh Government and NRW policies and procedures, and where appropriate, voluntary regulation such as the independent certification of the Welsh Government Woodland Estate (WGWE).
As a Welsh Government Sponsored Body (WGSB), any commercial activity undertaken by NRW has to satisfy the requirements set out for public bodies in the Government’s “Classification of Public Bodies: Information and Guidance”.
Although there are a number of acts and polices that apply to govern the work at NRW there are two Wales specific Acts: The Well-being of Future Generations Act (2015) and the Environment (Wales) Act (2016) that touch on all the work undertaken within the commercial team.
The Well-being of Future Generations Act requires public bodies in Wales to consider the long-term impact of their decisions, to work better with people, communities and each other, and to prevent persistent problems such as poverty, health inequalities and climate change. Each public body must develop a set of Well-being Objectives that are reviewed annually and published in a Well-Being Statement.
The Environment (Wales) Act 2016 aims to promote and apply the principles of Sustainable Management of Natural Resources (SMNR) across Wales.
The two Acts are closely aligned, with the SMNR principles following the five ways of working set out in the Well-being of Future Generations Act:
Throughout the development of this strategy NRW has been conscious of these five ways of working and each has been carefully considered when developing our overall objectives.
These two Acts do not entitle NRW to carry out any commercial activity we want, only those that are within our remit as set by the Welsh Government. The Welsh Government would either need to alter the legislation or provide NRW with the necessary delegated authority if we wanted to carry out any commercial activities outside our current legal powers, provided it was within the Welsh Government’s authority to do so.
In order to carry out any commercial activity, we must accommodate and work within all NRW’s existing policies and strategies, ensuring consistency of approach and our overall contribution to the organisation’s well-being objectives.
Some of the most relevant documents are:
The following principles will guide how we deliver this strategy.
Planet, People, Prosperity: to generate income for NRW through green and sustainable commercial development, allowing us to increase our contribution to Wales’ environmental, social, economic and cultural well-being.
A circular business model articulates the logic of how an organisation creates, delivers, and captures value to its broader range of stakeholders while minimising ecological and social costs.
NRW Commercial has a responsibility to facilitate and enable our customers, suppliers and stakeholders to work together to find this resource efficiency and help to move Welsh businesses into a more circular business model.
Businesses applying circular principles and demonstrating a strong commitment to the People, Planet and Prosperity agenda, are working across their supply chains to reduce linear business modelling and have demonstrated greater resilience in times of crisis.
These companies are:
Through the formation of a Commercial Network, NRW Commercial will foster relationships across businesses between all sector areas and provide that essential enabling opportunity to encourage the circular approach.
In delivering our vision, we will focus on the following commercial strategic objectives:
If we are to achieve our objectives and benefit Wales, NRW needs to ensure that we are innovative, modern, fit for purpose, and an attractive partner for those looking to invest in Wales.
There are seven sector areas within NRW that generate income or facilitate efficiencies, supporting our business to reinvest in doing more for the environment.
These sectors are:
Some of these sector areas are more established than others, and many have responsibilities that overlap or will work closely together.
This strategy links all these areas with overarching expectations, regardless of speciality.
There are also other areas of the business that generate income not situated in the commercial team such as our permissions and permits offering. These are out of scope of this strategy.
There are five where we want to improve, which we believe will be crucial to success.
Delivering this strategy will require partnership-working across NRW and with external partners.
The need to address the climate and nature emergencies is the backbone of our strategic outlook. We are actively seeking partners who share our values and want to work with us to drive the green economy and our environmental agenda forward. It requires stronger networks across Wales and the sharing of best practice.
We already work with many partners such as the Welsh Government, which provide a cumulative opportunity for enabling development, but we want to do more to work collaboratively with new and existing partners to reach solutions and to share experiences on what works well. Widening our current networks and the data and information they bring will help to develop sustainable commercial activities and provide potential commercial extras that can enhance an offer and widen the benefit and impact.
In order to facilitate our partnerships, NRW Commercial pledges to abide by the following SOFT approach in all our transactions with stakeholders and customers:
Share: Sharing information inevitably leads to collaboration and innovation. So NRW Commercial will be more forthright in its sharing of information and feeding back our successes.
Open: Willing to consider and enable different approaches across our commercial development opportunities, working with stakeholders at all levels, including small and big businesses, community groups and third sector organisations.
Free: We will continue to ensure that the Welsh Government estate retains its free and open access for the people of Wales.
Trust: NRW will be transparent in its undertakings and be held accountable to the people of Wales when pursuing its commercial agenda.
We will develop more agile processes and governance within NRW to enable quicker delivery from concept to market while adhering to our legal obligations.
Improved routes to market are essential if we are to create a supply chain that is robust and reduces waste and carbon release. There is significant potential to create new products by building on what we already have and marketing this to either current or new markets. This is a key area for developing circular economies by using local supply chains and Wales-based operators.
We will develop greater market intelligence by fully utilising available data sets and market trends internally and externally. While the world is incredibly data-rich, the challenge is to know what is available and where and how we can harness the information suited to our requirements. Cross correlation of datasets aimed at future forecasting will improve our ability to be proactive. It is also about finding ways to better present data and market intelligence, making it easier for people to understand and to facilitate decision-making.
Key Performance Indicators (KPIs) are an essential tool for assessing both ongoing progress during developments and for establishing overall success of a project or commercial activity(ies). Picking the right KPIs for each development, ensuring that the KPI is measured correctly and standardising KPIs for cross-comparison against commercial developments in other sectors will give a really clear picture of what we are doing well, what needs to be improved and where projects are failing to hit some of our key objectives.
KPIs will also ensure we can act quickly to mitigate risk, improve efficiencies, make savings and ensure value for money.
We will explore alternative funding models and new contractual mechanisms that will offer more diversity and resilience across our estate and encourage new partners to engage with NRW and widen the ability for smaller groups to get involved in commercial opportunities.
If NRW is to offer sustainable returns like other leading companies, it will need to consistently innovate and think creatively. New technologies, materials and service delivery models will be essential in supporting initiatives to tackle the climate and nature emergencies, especially in the development of an improved circular economy.
An innovative mindset will encourage business growth in Wales and stimulate the attractiveness of working in partnership with NRW. It will also achieve a wider ambition to draw the natural resources sector together to identify common issues and find operational solutions.
Cross-fertilisation of technology and ideas will be important to success. For example, technology with an intended use in one sector can be transferred to a new sector with a new use. Exploring other sector technologies can enhance and create commercial opportunity or offer a direct improvement.
In innovating, we will manage risks rather than avoid them. While some commercial developments can fail to deliver on expectations, this shouldn’t deter us from considering a new technology or idea if we are aware of the risk and can manage it effectively.
We will aim to measure success against the three pillars of ‘Planet, People and Prosperity’, which will require us to innovate in this area.
We will support start-ups and investors, using our commercial arm to encourage and advise new business and to inspire new products and services to help grow the green economy.
The commercial portfolio is already diverse covering timber, energy and analytical services. However, there is scope to diversify further into tourism and recreation, arts and culture.
In some cases, these new markets might be small and bring in small financial returns initially. However, the returns for people, for the planet and the contribution towards local economic growth could be far greater.
It is vital that we grow responsibly with projects that will offer sustainable benefits that support multiple outcomes.
Attaching special interest products and services with tangible future growth potential, to a core offering, can help attract investors and developers. It offers a unique selling point, the opportunity for additional benefits and profits that competitors may not have and in some cases, can reduce the overall risk of a development.
Positioning NRW as a commercially viable delivery partner is incredibly important. Potential partners need to see NRW not only as a public sector body or a natural resources regulator but as a commercial operator that is a champion for responsible development.
These are the sectors of immediate interest to us, accompanied by some case-studies of some recent successes in these areas.
NRW’s energy programme has been designed in response to the Welsh Government’s energy policy and targets including the aspirations that 70% of Wales’ electricity is generated by renewables by 2030, and all new energy projects in Wales to have an element of local ownership from 2020.
NRW has been very successful in encouraging developers and investors to come to Wales and invest in onshore wind and energy projects on the WGWE.
The direction of travel from the Welsh Government is to seek to maximise the benefit of such investment to the people and economy of Wales.
These green energy schemes are vitally important in helping Welsh communities diversify their energy supply and reduce dependencies on fossil fuels. They create net zero greenhouse gas emissions, local jobs, develop skills and generate significant community benefit funds.
Through careful design and implementation of mitigation plans, the negative impacts of such developments on landscape and local ecological factors can be significantly reduced and largely offset.
NRW has significant experience of working with developers to deliver significant SMNR benefits through wind energy projects.
Pen-y-Cymoedd Wind Farm, delivered by Vattenfall UK Ltd, is situated in the Afan Forest Park between Neath and Merthyr Tydfil and showcases the range of SMNR benefits brought to Wales by renewable energy.
The wind farm consists of 76 wind turbines, each 145m in height, that can generate 228 MW of electricity at maximum capacity. This means that it can provide power to around 188,000 homes and will displace the equivalent of 6.4 million tonnes of carbon dioxide generated by fossil fuels over the lifetime of the project.
The project generates significant rental income to the Welsh Government.
In addition, the project has set up a £50million community benefit fund which is actively supporting local community initiatives and includes a £3million habitat management plan that is delivering large-scale peatland restoration.
NRW is responsible for the sale of timber from the Welsh Government Woodland Estate.
NRW currently offers an available timber harvest of 850’000m3 per annum or around two-thirds of the total Welsh market, which generates a typical gross income of approximately £20million.
Current timber sales range from 15m3 to 15000m3 per tender, including small firewood parcels.
The timber on the estate consists of Spruce (60%) and Larch (25%) and a mixture of other species in the remainder, but this can vary dramatically across areas.
Because trees take around 60 years to grow to maturity for market, NRW is able to provide a production forecast that allows us to establish what will be available for market over the long-term. However, NRW cannot predict how prosperous that market will be year on year.
The Timber Sales and Marketing team has identified a number of workstreams that can immediately feed into the Commercial Strategy overall vision.
A new Timber Valuation Tool has been developed by NRW to ensure a reliable, consistent, data-orientated approach to timber sales, across the NRW estate.
This tool assesses working costs, crop product, crop prices across species and accounts for differences in timber quality. Additional consideration is given to the location, to the nearest supply chain, and size of timber parcels.
Included in every valuation document is a narrative explaining how the tool was used, ensuring transparency in our approach and demonstrating we are achieving best value for money on our timber sale transactions.
The approach is also fairer to our suppliers and helps to maintain a reasonable level of competition in the market place; each sale can attract over 25 customers bidding against each other for each timber sale.
Another advantage is that this bottom-up budgeting approach to our timber valuations allows for just-in-time valuation adjustments to respond to an often volatile market palace, ensuring that we attain the current market value for timber, and giving NRW confidence and assurance if we decide not to award a sale because the bids are not attractive.
Whilst we will avoid selling at any price, we do recognise the importance of a consistent supply chain of timber to the wood processing industry in Wales, and our commitment to offer and supply timber from the WGWE benefits the Welsh Government’s ambition to promote and sustain a vibrant circular economy in Wales.
Around 10-12% of the workforce in Wales is employed in tourism and recreation enterprises. These jobs are not only located in large towns, but also rural areas, providing essential local employment and revenue. Even though the sector has suffered terribly as a result of the pandemic, it remains one of the key enablers of a green recovery.
Many of the locations that NRW manages make a significant contribution to Wales’ tourism and recreation offer, for both visitors and those living in Wales, Our sites offer captivating walks and hikes, adrenaline-fuelled adventures on world-beating mountain bike trails, adventure playgrounds, wild swimming, and the offer of exploring Wales’ inspiring heritage and culture. NRW is keen to ensure that we grow our recreation offering; that we offer more choice, more experiences and more developments that provide something to suit every taste. We will do so while avoiding the pitfalls of over-tourism and negative impacts to the climate and nature emergencies.
Multiple studies have shown that access to the outdoors brings significant benefits to both physical and mental well-being. But many of these studies have also shown that there is an increasing disconnect between children and nature, therefore increasing access for all to green spaces offers well-being and social benefits as well as tourism benefits.
Concerns about ‘over-tourism’ and the pressure that puts on communities and the environment must be taken into careful consideration in developing tourism opportunities.
We want to be more innovative and data-driven in our approach to the work we do in this sector, taking care not to apply a ‘one size fits all’ approach to recreation. Instead, we must carefully consider the type of activity and developments that suit our sites and accept that change is not required at every site we manage.
NRW places significant importance on protecting and promoting our culture. Wales is blessed with a diverse arts, music, literature and heritage sector supported by its own language that gives the people of Wales a sense of belonging and identity.
Creative businesses generate over £2billion of annual turnover and employ around 50,000 people. Levels of attendance and participation or volunteering at cultural events in Wales is high, at around 80% and 40% respectively. There is sound infrastructure in place and heritage sites often offer cultural activities in both Welsh and English. However, many of these sites are concentrated in South Wales and unsurprisingly around key transport hubs. This accessibility offers key opportunities to attract visitors to Wales and to encourage local participation.
Although NRW’s remit focusses on land management, we know that culture empowers and contributes to a number of well-being goals. NRW wants to use the sites we manage as a facilitator and enabler to promote and grow that culture.
The recent Covid-19 pandemic has hit this sector hard and left many independent artists and culture activities vulnerable, with the closure of theatre, music and film sets, disrupted material supplies and commission cancellations. We are also yet to know exactly what opportunities will be available in light of the UK’s departure from the EU.
NRW Commercial has started to identify a number of possible developments that could mitigate some of issues. One year ago, our approach would probably have been very different but over the last year we have been working hard on exploring opportunities, looking not only at what is needed, and how NRW can contribute and various models of delivery, but also how we can do all this post Brexit and post Covid19.
NRWs contribution to culture aims to develop our vision to being ‘unmistakably Wales’ and our mainly outdoor locations are ripe for a post-Covid world where some restrictions may still apply.
We will do this through:
Natural Resources Wales Analytical Services (NRWAS) is an environmental analytical laboratory accredited to ISO/IEC17025:2017 (the internationally recognised standard for laboratory competence, impartiality and consistent operation), with industry-leading expertise in complex freshwater and sediment analysis.
Since 2013 NRWAS has been providing evidence, guidance and analytical solutions to NRW, as well as providing analytical services for a wide range of clients across the UK including utility companies, local councils and not-for-profit organisations. The team relocated to Swansea University in 2017, offering an opportunity to expand its commercial opportunities and foster closer links with academia. The laboratory must always prioritise its organisational obligations, but by maximising the utilisation of its spare capacity and broadening its analytical portfolio it will be able to play a key role in the Green Recovery.
We will look at:
The NRW procurement team is an essential component of the commercial team providing essential tools to ensure that our supply chain operates as effectively as possible, offering best value for money, increasing our supply options, simplifying processes, creating a transparent and fair playing field for bidders and supply partners, monitoring compliance, and providing effective supplier management.
There are currently two vital areas of consideration for the next two years:
The strategy will improve procurement knowledge across the commercial teams, to better communicate procurement options and procedures and to ensure that the procurement team itself has all the necessary knowledge and tools at its disposal in order to facilitate the main areas of consideration.
NRW plants thousands of trees every year and we have just undergone an extensive £9m procurement exercise to find a supplier so that we can plant more!
As part of that procurement NRW wanted to ensure it was focussed on sustainability, helping to deliver on the well-being goals and the ambitions in the proposed circular economy strategy for Wales, Beyond Recycling.
NRW partnered with WRAP Cymru and Resources Futures to ensure that the procurement criteria encouraged suppliers to think about how they would support these goals.
We were particularly interested in the plastic film that is used on every tree to protect its young roots before planting. We wanted to know if there was a more sustainable product that could do the same job.
After extensive research and talking to suppliers, unfortunately this is not yet possible, but we have now set expectations that this is what we are looking for and many suppliers are working on it.
Whilst we have not met our ambition yet, we have set clear expectations and have made provision to continuously assess the situation so that we can switch to a more sustainable option as soon as it is available.
Although there are areas of commercial activity that can be clearly defined by specific portfolio areas, NRW also undertakes a number of commercial activities that either do not fit succinctly into these portfolios, or do not sit directly with the commercial team but are activities carried out in other areas of the business.
This kind of commercial development currently includes, but isn’t limited to, filming rights and permissions, permits for activities on our land, mineral mining and the green marketplace.
This strategy is also focussed on growth and resilience and ensuring that we develop the right opportunities for different areas of Wales, driving overall socio-economic benefits and promoting innovation. Therefore, we expect our business development growth to be increasingly varied in the future.
It is difficult to be clear what are plans are over the next five years, other than to emphasise the need to be quick to react to markets, but we have outlined some areas of immediate interest.
The overarching aim of this strategy is to clearly set out the principles and overarching ambitions that the commercial team will deliver.
It is a blueprint that sets out how ambitious we will be in our quest for a more business-like, commercial culture across the organisation. Only by encouraging innovative and creative solutions to the challenges we face now can we achieve that ambition and make a strong contribution to tackling the nature and climate emergencies for future generations.
The NRW commercial team acknowledges that there is a lot of work to be done if we are to be more effective in our commercial approach. Our implementation plan builds on our existing strengths but also addresses the areas we need to develop.
As well as continuing to deliver on its current projects and its business as usual activities in 20/21, the team will need to work towards creating a commercial framework focussed on growth and sustainability.
We will develop a comprehensive commercial communications and marketing plan supported by more detailed portfolio focussed communications plans, such as the five-year Timber Sales and Marketing Plan.
The plan will outline how the commercial team will apply the SOFT principles to increase engagement and awareness both with internal and external stakeholders and interested parties. This will include NRW commercial participation at trade shows, public events (where possible) and will work to showcase the commercial opportunities to both local, UK and international communities.
Integral to this strategy is the communication of the message that NRW Commercial is ‘Open for Business’, and that we are actively looking for new potential partners and industries.
We will create a clear roadmap for potential partners on how to navigate NRW policies and procedures and the governance and compliance checks we must do. This will help to set expectations on what we can or cannot deliver.
We will commission a new markets report to drive forward our diversification strategy and help us spot new opportunities. This will feed directly into our commercial delivery plan that will track ongoing commercial opportunities over the next five years.
A real-time performance dashboard will ensure effective monitoring of the delivery plan and enhance the ongoing scrutiny of the commercial activity(ies).
NRW is a large, dynamic organisation so it is essential that the Commercial Strategy continues to fit succinctly with other areas of the organisation, avoiding contradiction, confusion or cross purpose.
NRW Commercial is overseen by the Head of Sustainable Commercial Development, who reports to the Director of Communications, Customer and Commercial. The Head of Sustainable Commercial Development is supported by the Commercial Business Board (CBB), which includes senior staff from multiple departments including Land Stewardship, Evidence, Policy and Permitting (EPP), Finance and Legal Services.
Through the Commercial Business Board, we will connect regularly with other linked work streams and feed these into the Strategy and our Delivery Plan as required.