)
Biodiversity
12.02.2025
Biodiversity net gain one year on
A year has passed since England’s Biodiversity Net Gain (BNG) rule came into effect, requiring many new developments …
What are biodiversity credits?
Biodiversity credits are helping businesses demonstrate their commitment to sustainability.
)
)
The twin crises of climate change and biodiversity loss demand urgent action. While carbon credits have become a familiar tool for businesses aiming to address their climate impact, a newer, complementary mechanism is gaining traction:
. But what exactly are they, and how can they help your business contribute to a nature-positive future?
As a company dedicated to helping businesses support high-quality nature projects, we know that navigating the world of environmental impact can be complex. This article unpacks the concept of biodiversity credits, explaining their significance and potential role in your organisation's sustainability strategy.
Defining biodiversity credits
The South Downs National Park. The Iford Estate, a project area that Earthly supports within the park, actively promotes biodiversity and ecological health that maintains the park's overall environmental richness. Photo: Sam Moore
At its core, a
biodiversity credit is a measurable and verifiable unit representing a positive outcome for nature
. It's a market-based instrument designed to channel finance into projects that actively conserve, restore and enhance ecosystems and the species within them. Think of restoring a degraded wetland, planting native woodlands to create wildlife corridors, or implementing species recovery programmes for endangered animals – these are the kinds of tangible, on-the-ground actions that biodiversity credits can fund.
Unlike carbon credits, which focus specifically on greenhouse gas emissions, biodiversity credits tackle the broader challenge of nature loss. They aim to protect and improve the health, resilience, and variety of life in a specific area. Importantly, these projects often deliver co-benefits, such as carbon sequestration, improved water quality, flood mitigation, and support for local communities through sustainable livelihoods and the preservation of cultural heritage.
Why the urgent need for biodiversity action?
The UN's 'State of Finance for Nature' reports indicate NbS investments must double by 2025 to meet global climate, biodiversity, and land goals.
The statistics are stark. We are losing species up to 1,000 times faster because of human influence on the environment, signalling what many scientists term the planet's sixth mass extinction. Currently, over a million species face extinction. This isn't just an environmental tragedy; it's an economic and social crisis in the making.
More than half the world's GDP depends significantly on nature. Healthy ecosystems provide essential services: pollinators for agriculture, wetlands filtering water, forests absorbing carbon, and natural barriers protecting against extreme weather. The
that nature loss disproportionately affects the poorest communities who rely directly on these services. Projections suggest unchecked biodiversity decline could cost the global economy trillions annually by 2050.
Despite the scale of the challenge, funding for nature restoration falls drastically short. The UN's
indicate that investment needs to more than double by 2025 and continue scaling significantly to meet global goals. Biodiversity credits offer a vital mechanism to help bridge this funding gap by monetising positive nature outcomes.
How do biodiversity credits work? The emerging market
The South Downs National Park, isone of the first areas in the UK to pioneer biodiversity credits. The biodiversity credit market is projected to grow significantly in the coming years, with global demand estimated to reach up to $7 billion annually by 2030 and $180 billion by 2050 - World Economic Forum.
The biodiversity credit market is still developing but holds immense potential, projected by some to reach billions annually by 2030 and potentially much more by 2050. Its growth is fuelled by several factors:
Regulatory drivers:
Global agreements like the
(aiming to protect 30% of land and sea by 2030) and increasingly stringent disclosure rules like the EU's
and frameworks like the
are pushing companies to account for and mitigate their impact on nature. In the UK, mandatory
regulations for developers also signal this direction of development.
Stakeholder expectations:
Investors, customers and employees increasingly expect businesses to demonstrate genuine environmental stewardship beyond mere compliance. Supporting biodiversity resonates strongly with these groups.
Market innovation:
Unlike traditional conservation donations, credits link finance directly to measurable, verified outcomes. Robust Monitoring, Reporting, and Verification (MRV) systems, often using technologies like remote sensing and eDNA, are crucial for ensuring transparency and accountability.
However, challenges remain. Standardising methodologies, ensuring robust verification over the long term, preventing greenwashing, and guaranteeing equitable benefit-sharing with local communities are critical for building market integrity. Initiatives like the
, which works to establish high-integrity frameworks, are vital in light of this.
The business case for investing in nature
A hare spotted within the Iford biodiversity project after habitat protection efforts. Businesses investing in biodiversity credits from nature-based solutions contribute to safeguarding habitats, aiding animal and plant species.
For sustainability managers and companies integrating nature into their ESG strategies, biodiversity credits offer compelling benefits:
Enhanced brand reputation:
Demonstrating commitment to nature resonates powerfully with conscious consumers and stakeholders, building trust and loyalty.
Risk mitigation:
Nature loss poses significant risks to supply chains and operations. Investing in biodiversity builds resilience and aligns with emerging disclosure requirements (TNFD, CSRD).
Meeting ESG goals:
Credits provide a tangible way to contribute to nature-positive goals and report on environmental performance.
Attracting investment & talent:
Strong environmental credentials are increasingly important for attracting investment and appealing to employees who want to work for purpose-driven organisations.
Innovation & leadership:
Engaging early with the biodiversity market positions companies as leaders in sustainability.
Taking the next step
The presence of skylarks at the Iford Estate biodiversity project shows successful habitat creation and restoration for farmland and other bird species. Your business can participate in these efforts, supporting our biodiversity projects that have positive environmental outcomes.
Biodiversity credits represent a promising, evolving pathway for companies to channel meaningful investment into protecting and restoring the natural world upon which we all depend.
By supporting high-quality, verified projects, businesses can move beyond simply mitigating harm, towards actively contributing to a nature-positive world, strengthening their brand, managing risks, and aligning with the growing expectations of society.
At Earthly, we specialise in identifying and verifying high-impact nature projects, including those generating pioneering Voluntary Biodiversity Credits. We help businesses understand their impact and invest confidently in solutions that deliver real benefits for carbon, biodiversity, and people.
to explore how your organisation can contribute.
Related articles