Terms of reference

Interim Board Terms of Reference

Version 2:  Updated 16 December 2024

1.        Background


1.1       The Interim Board exists as an advisory board to Wessex Water Limited.  It is intended that the Interim Board members will become directors of a newly incorporated entity, independent of Wessex Water Limited and its group companies, and specific to the Interim Board’s purposes.


1.2       The Interim Board oversees one Market Operator, EnTrade, which is a trading arm of Wessex Water Limited. The activities of EnTrade are in the process of assignment from Wessex Water Limited to its wholly owned subsidiary, EnTrade Limited.  After the assignment is complete, the Interim Board will continue to oversee the activities of EnTrade as a Market Operator.

2.     Purpose



2.1       The purpose of the Interim Board is to:

a Oversee the governance framework for piloting Environmental Markets in particular geographic areas (‘Governance’).
b Ensure there is a transparent, fair and efficient set of rules by which landholders can offer to supply Nature-based Projects on their land, and third parties can bid for the rights to the Environmental Services delivered by these projects (‘Market Rules’).
c Monitor, report and advise with the aim of securing compliance with the Market Rules in the operation of pilot Environmental Markets (‘Market Oversight’)1.
d Appoint a Scientific Advisory Group to provide expert scientific advice in relation to the relevant Standard(s) and Monitoring Plan(s) to apply in pilot Markets; (‘Scientific Advice’).
e Approve Collaboration Agreements proposed for the development and operation of pilot Markets in particular catchments or geographic areas; (‘Collaboration’).
f Require that the Market Operator maintains the market infrastructures, systems and processes necessary to operate high integrity Environmental Markets (‘Market Infrastructures’).
g Provide advice to government and regulators on the future governance of Environmental Markets (‘Future Governance’).

3.     Functions


3.1   The functions of the Interim Board are to:

a Authorise a Market Operator for each Environmental Market and monitor, report and advise with the aim of securing compliance with the Market Rules for that Market .
b Approve and maintain a template set of Environmental Market Rules, considering feedback from Market Participants, regulators and other stakeholders.
c Approve the Standards for quantifying the Environmental Services from a Nature-based Project for use in the Environmental Markets.
d Consider and approve new Standards for use in the Environmental Markets, in consultation with the Scientific Advisory Group.
e Approve the Environmental Opportunities Statement developed by the Market Operator prior to each Market Round
f Approve the Market Settlement Rules for each Environmental Market.
g Approve the Monitoring Plan for each Environmental Market in consultation with the Scientific Advisory Group; review annually the outcomes of the Monitoring Programme; and at the end of the Monitoring Period, review the quantity of Environmental Services delivered by the Nature-based Projects.
h Approve the level of Credit Reserve to be applied in each Market Round, and ensure that the Market Operator retains the relevant number of Environmental Credits in the Credit Reserve.

4.      Composition and Procedure


4.1       The Interim Board will comprise a minimum of three members with skills and experience covering: 

  • Commercial law and/or competition law
  • Environmental regulation 
  • Market design and settlement 
  • Economics and/or economic regulation 
  • Environmental and/or agricultural and/or catchment science
  • Farming and/or land management 


4.2       The Interim Board will be chaired by a suitably skilled and experienced person who will act, to the extent it is possible before the Interim Board becomes an incorporated entity, independently of the Market Operator and any Market Participants. Decisions of the Interim Board will be by consensus.


4.3       Quorum for the Interim Board is three.


4.4       The Interim Board will determine its own procedures.


4.5       The Interim Board will develop and publish an Operating Procedure setting out how it will meet its purpose and exercise its functions as set out in these Terms of Reference.


4.6       The Operating Procedure will include a Conflict of Interest policy and the Interim Board will maintain a Conflict of Interest Register.


4.7       Meetings will take place at least quarterly and ‘as required’, as determined by the Chair of the Interim Board.


4.8       Board appointments will be for an initial term of 12 months renewable for additional 12-month periods thereafter.


4.9       The Interim Board will undertake a self-assessment of its performance and review of the interim Terms of Reference on an annual basis.


4.10    The Interim Board may invite a public sector observer(s) to attend Board Meetings.

5.      Secretary 


5.1     The Interim Board will appoint an Interim Board Secretary to support the Chair and Board Members in its effective operation.


6.       Notice of Meetings 


6.1       Unless otherwise agreed, notice of each meeting confirming the time and date together with an agenda of items to be discussed, will be forwarded to each member of the Interim Board and any other person required to attend no later than five working days before the date of the meeting, unless agreed otherwise in advance. Supporting papers will be sent to Board members and other attendees as appropriate, at the same time. 


6.2       Interim Board Members may participate in a meeting by means of telephone, video conferencing facility or other suitable communication equipment.

7.        Minutes 


7.1       The Interim Board Secretary will minute the proceedings and decisions of all meetings of the Interim Board, including recording the names of those present and in attendance. 


7.2       Minutes of Interim Board meetings will be circulated to all members of the Board.


8.          Reporting 


8.1       The Chair will hold a meeting twice a year with the Chief Executive of Wessex Water Limited.


8.2       The Interim Board will contribute to the Market Governance workstream of the UK Nature Markets Dialogue.



9.          Resources and Review 


9.1       The Interim Board will: 

a be provided with specialist advice on the design and operation of Environmental Markets, and the policy and regulatory settings needed to facilitate market development.
b have access to sufficient resources in order to carry out its duties, including access to the Interim Board Secretary and legal and other professional advice as required.
c give due consideration to laws and regulations and other relevant guidance as necessary.
d at a time deemed appropriate by the Chair, arrange for a review of its Terms of Reference and transition the oversight of the Environmental Markets to an on-going governance arrangement, after incorporation of the Interim Board.

10.              Authority 


10.1       The Interim Board may: 

a seek any information it requires from the Market Operator in order to perform its functions.
b invite external specialists and stakeholders to attend meetings to inform and contribute to discussions on any matter related to its functions.
c call a representative authorised by the Market Operator to attend a Board Meeting to respond to questions related to the operation of a Market and the application of the Market Rules.

Change History

Issue Description of Change Date
1 Issue and approval of Terms of Reference. June 2023
2 Updated to: • confirm the role of the Board as an arms-length advisor to Wessex Water Limited • clarify the role of the Board in conferring authority on the Market Operator, and ensuring compliance with the Market Rules. • Reflect the establishment of the Scientific Advisory Group. December 2024
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