Deforestation is accelerating, biodiversity loss is at record levels, and conservation funding still falls short by more than $700 billion a year, Biodiversity credits are an innovative financial tool designed to support the protection and restoration of nature. Unlike older offset systems that merely compensate for damage, these credits are intended to deliver a measurable, net-positive impact on species and ecosystems.
The process works by turning proven conservation outcomes—such as a reforested area or a protected wetland—into a tradable “credit.” Companies can purchase these credits not to offset their own environmental harm, but to make a direct, additional investment in nature’s recovery.
The success of this model depends on two key elements:
- Supply:Â A robust pipeline of high-quality conservation projects, ideally led by local communities who are best positioned to manage their natural environment and must benefit fairly from the process.
- Demand:Â Strong corporate motivation to participate, driven by factors like evolving consumer preferences, new nature-related reporting standards, and regulatory pressures.
When governed by strong integrity standards to ensure transparency and prevent greenwashing, biodiversity credits can channel significant funding to frontline conservation efforts, offering a powerful new mechanism to help halt and reverse global biodiversity loss.
It is expected that by 2030, biodiversity credits will have evolved into a mature and functional global market. It is anticipated that at COP17 in Armenia, there will be a significant and focused push to establish stronger frameworks and clear rules to accelerate the development of biodiversity credits and ensure their integrity for nature and people.
