Badly ruins ground on small habitat (12)

I believe the answer is:

surroundings

'habitat' is the definition.
(thesaurus)

'badly ruins ground on small' is the wordplay.
'badly' indicates anagramming the letters.
'on' says to put letters next to each other.
'small' becomes 's' (abbreviation - e.g. clothes size).
'ruins'+'ground'='ruinsground'
'ruinsground' is an anagram of 'surrounding'.
'surrounding'+'s'='SURROUNDINGS'

(Another definition for surroundings that I've seen is " Environment".)

I've seen this clue in The Telegraph.

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