COMPANIES BUYING IN

With so many questions swirling around biodiversity credits, why would a company buy them?

In some places including parts of Australia, the government forces companies to buy nature credits, funding preservation in one area to offset damage caused in another. European Union-based firms may also choose to do so as new rules force disclosure of their impacts on nature.

Aleksandra Holmlund, a Swedish University of Agricultural Sciences researcher attending the COP15 summit with the Biodiversity Credit Alliance industry group, criticised the idea of allowing companies to offset destruction elsewhere.

COP15 participants are mainly discussing “voluntary markets” run by the private sector rather than “compliance markets” trading government-mandated investments. But some doubted that voluntary credits would attract sufficient investment.

Martijn Wilder, chief executive of climate change-focused investment and consultancy firm Pollination, said governments must require companies to invest in biodiversity.

“Unless you actually are forcing a company do it, they’re not going to do it,” Wilder said.

The current draft of the COP15 deal also includes a reference to promoting financing schemes like “biodiversity offsets.”

PRIVATISING NATURE

Outside the UN talks, the Biodiversity Credit Alliance and World Economic Forum (WEF) are holding separate discussions on how to implement a voluntary market.

The alliance, an informal group of about 10 market players, aims to officially launch next year, Holmlund said. It will also develop a means of peer-reviewing credit issuance to ensure they meet conservation claims.

Analysts said the market needed strict standards, noting the early free-for-all in carbon markets resulted in many low-quality projects.

“When you can point to many examples in a market of low quality or low standards, it creates distrust and it impacts the integrity of the overall market,” said Lucy Hargreaves, policy chief for carbon credit platform Patch.

Verra, operator of the world’s largest registry of carbon credits, said it will release its own standard for biodiversity credits next year.

A report last week co-authored by the UN Development Programme endorsed well-structured “biocredit” schemes and offered recommendations. But other experts warn biodiversity credits are an attempt by companies to “greenwash,” or make false claims of sustainability.

Green Finance Observatory director Frederic Hache said that biodiversity credits are no replacement for nations enforcing strict laws prohibiting nature’s destruction.

“These markets are reconceptualising conservation based on short-term profitability criteria and privatising it,” he said.