The International Biodiversity Credits Advisory Group (IAPB) is an independent initiative established by France and the United Kingdom in June 2023 to facilitate the creation and growth of high-integrity biodiversity credits markets and to encourage the implementation international level of a favorable political and institutional framework and regulatory mechanisms that are credible, timely and coherent. At COP 16 Biodiversity, it launched its Framework for High Integrity Biodiversity Credit Markets.
It is nature that provides life with the conditions for its sustenance.
Responsible management of nature is fundamental to the health of the planet and the survival of the human species. There is an extremely close interdependence between nature, humans and biodiversity.
Yet the nature around us and its rich and vital biodiversity that underpins our economies are in danger, as we face a dual crisis of biodiversity loss and climate change.
As the Global Assessment on Biodiversity and Ecosystem Services (IPBES, 2019) report, the Dasgupta report on the economics of biodiversity (2021) and many other studies have shown, we are depleting nature to unsustainable levels.
Without greater investment and effective governance, biodiversity will continue to decline. Reversing this biodiversity crisis depends on achieving the goals of the Global Biodiversity Framework (GBF) from Kunming to Montreal, which calls for effective resource mobilization and alignment of global financial flows with international goals in terms of biodiversity.
Economic decision-makers, including governments, international organizations, multilateral and financial institutions and businesses, are not doing enough.
More needs to be done to encourage practices that protect and regenerate
nature rather than those who destroy it. The economy and finance must
take into account biodiversity and its values as part of the transition to sustainable growth. We need a range of public mechanisms and market mechanisms, and we need to encourage businesses to value and invest in biodiversity.
Biodiversity credits (and credit markets) provide a mechanism for market actors to channel financial flows to support the transition to a nature-friendly future.
Beyond the simple mobilization of capital, the adoption of biodiversity credits could help to modify the relationship of companies and financial markets to nature and to better support all those who, on the ground, preserve it.
The development of high integrity biodiversity credits is possible, as is the gradual scaling up of these markets. This requires action from multiple stakeholders, as outlined by the IAPB Framework. In particular, governments need strong public policies or regulatory mechanisms to unlock funding that benefits Nature and those on the ground who preserve it.
Integrity means that credits must be designed in such a way as to provide measurable and verified benefits for Nature, to guarantee fair participation and income for people and to be based on regulated markets. Integrity at all levels is a prerequisite for the growth of these markets, not a barrier to it.
The role of those who, on the ground, preserve nature is essential. Indigenous Peoples and local communities must be co-creators of projects and markets and be involved in all aspects of their design and implementation.
A biodiversity credit is a “certificate which represents a unit of benefits for biodiversity which are both sustainable, measured, backed by tangible evidence and additional to what would have happened without intervention” (BCA, 2024).
The work of the IAPB has relied on this definition, valid both in terms of conservation and restoration, to deepen certain terms, with the aim of ensuring the development of high integrity markets.
Biodiversity credits can be used for:
- Make contributions, based on tangible evidence aimed at objectives of protecting and restoring Nature;
- Serve to finance, according to strict criteria, local and supervised compensation for impacts on biodiversity;
- Invest in business value chains to make them more resilient.
The IAPB does not support approaches consisting of advocating international biodiversity compensation: the action must imperatively remain local and relate to ecosystems similar to those it is compensating for.
In this first phase, biodiversity credit markets will be numerous and will follow a project financing logic. Biodiversity is not fungible, so a standardized unit of biodiversity is not appropriate (projects will be funded according to their specific circumstances and results).
The proposals will therefore have to be adapted to multiple markets, depending on the context, actors and motivations. It is important to emphasize that at this stage, the IAPB does not support secondary markets.
An ambitious and urgent collective commitment, from all market players, is necessary to rapidly develop biodiversity credit markets.
