The first bank in Europe to purchase biodiversity credits

In 2023, the Swedish bank, Swedbank, became the first European bank to celebrate the

purchase of biodiversity credits

. This signalled a groundbreaking approach to nature preservation for the financial sector - ensuring nature has a place in promoting sustainable development. The credits were generated through a forestry project in Sweden, developed in collaboration with the Swedish University of Agricultural Sciences (SLU). 

This move marked a significant step in connecting business with the natural capital we all depend on, as biodiversity credits emerge as an innovative tool that links financial markets and nature conservation.

The biodiversity credits purchased by Swedbank were generated by Orsa Besparingsskog, a forest cooperative in central Sweden. The credits represent the preservation and restoration of high-value, biodiverse areas within the cooperative’s vast forest, which spans 75,000 hectares. This pioneering transaction was not just a financial deal, but a shift toward incentivising sustainable forestry practices and providing a model for how businesses can actively participate in preserving ecosystems.

Biodiversity credits

, like carbon credits, are designed to create economic value for actions that preserve or restore nature. However, while carbon credits focus on reducing greenhouse gases, biodiversity credits target the conservation of ecosystems and species diversity. Swedbank’s acquisition of 91 biodiversity credits from the Orsa project reflects a growing awareness of the importance of biodiversity in maintaining healthy ecosystems, and it showcases how businesses can leverage financial tools to support environmental goals.

Swedbank’s involvement demonstrates how financial institutions can play a key role in fostering biodiversity conservation. “Preserving biodiversity and restoring ecosystems is crucial,” said Ulf Moeller, Swedbank’s head of forestry and agriculture. He emphasised that biodiversity credits offer forest owners an alternative source of income, allowing them to generate financial returns without resorting to traditional logging or resource extraction. By creating an economic incentive for forest owners to preserve natural areas, biodiversity credits align the interests of business and nature.

This innovative solution is particularly important in a world where biodiversity loss is accelerating due to deforestation and climate change. Forests like Orsa's, which cover vast expanses of boreal landscapes, are critical for maintaining biodiversity and supporting ecological processes. Yet traditional forestry practices often prioritise short-term economic gains over long-term environmental health. Biodiversity credits offer a solution by financially rewarding sustainable forest management and conservation efforts.

The biodiversity credits acquired by Swedbank are based on a methodology developed by a team of experts from SLU. The project spans 13 hectares of the Orsa forest and focuses on three main areas: restoration of open old-growth pine forest, sustainable management of production forests and overall forest conservation. Each of these areas plays a crucial role in preserving Sweden’s unique boreal ecosystems, which are home to numerous species and provide essential ecosystem services.

Similar to

Earthly’s nature-based project assessment

, the SLU team developed a scoring system that awards points for various actions taken to protect or restore biodiversity. Points are assigned based on factors such as the presence of rare species, the amount of deadwood in the forest (which is vital for many organisms), and the extent of sunlight reaching the forest floor. This level of detail is extremely helpful when judging a project to be high-quality. These points are then translated into biodiversity credits, with higher scores representing greater conservation value. The credits are verified by a third-party every five years, ensuring that the project’s goals are being met and that new credits can be issued as progress is made.

As businesses increasingly recognise the importance of sustainability targets and initiatives, these credits provide a way to directly invest in the preservation of nature. By offering an alternative income stream to forest owners, biodiversity credits help align economic incentives with environmental stewardship, encouraging sustainable land management.

For Swedbank, the acquisition of biodiversity credits is part of a broader commitment to environmental sustainability. The bank has

pledged to support the biodiversity project for 20 years

, with new credits due to be generated based on the project's performance. This long-term approach reflects the understanding that nature conservation is not a one-time effort but requires sustained engagement over decades.

As we know, the biodiversity credit market is still in its early stages, but it is gaining traction rapidly. A 2024 BloombergNEF report highlighted that biodiversity crediting schemes are now covering over 800,000 hectares worldwide, with $8 million in funding pledged to date.

Swedbank’s purchase of biodiversity credits is a hopeful sign of things to come, as financial institutions around the world explore ways to support biodiversity conservation. This emerging market is expected to grow as more companies recognise the economic and reputational benefits of investing in nature. 

As the market grows, it has the potential to reshape the way businesses interact with the natural world, creating new opportunities for sustainable development and long-term environmental stewardship.

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