Co-creating and applying a theory of change for biodiversity credits - towards a nature-positive future

Our main aim is to deliver integration between the financial sector and biodiversity by adapting and implementing the innovations we are developing with current UKRI-funded projects on the 'economics of biodiversity'. These innovations started with developing a method to quantify biodiversity that is appropriate for use in biodiversity valuation and trading, and thus in biodiversity credit standards. We now propose to take the next step in developing tools and best-practice guidelines for (a) landowners and stewards to use when developing biodiversity projects for which biodiversity credits are sought, (b) assessors of biodiversity change (private knowledge providers, consultancies or universities) to consider when measuring biodiversity on behalf of either the landowners or the finance industry, (c) the finance industry to use when assessing applications for biodiversity credits, (d) investors to use when looking to invest in biodiversity.

This work has been co-designed from the start. Indeed, it is led by stakeholder needs, with strong encouragement from the finance sector. In developing biodiversity measurements for biodiversity credits, we are working closely with Plan Vivo (a UK charity and the longest-standing carbon credit issuer; see Beneficiaries) and Gold Standard (2300 carbon credit projects in 98+ countries). We have a wide non-academic network involved beyond that, from all relevant sectors (a) to (d) above. With the current proposal, we aim to extend the network further and take the next crucial steps to position this UK-led innovation as key in the global standard of biodiversity credits. This is timely given the explosion of interest in private investment in biodiversity (triggered by new regulatory and reporting requirements for biodiversity net gain and a nature positive future) combined with a lack of appropriate biodiversity finance tools. Whilst our main focus is on the UK, we will ensure that the investment NERC and ESRC have made in our biodiversity credits work in the UK is aligned with the key global developments in that area. This aim is aided by the appointment in August 2022 of the project's PI to the World Economic Forum's Biodiversity Credit Working Group and its 'Pilot' sub-committee.

We will adopt a 'theory of change'-based approach, meaning that we will explicitly develop and agree intended outcomes and assumptions, connect the outcomes to steps required to achieve them, determine appropriate indicators of change, and identify interventions needed that are not already planned - all co-created with stakeholders. To achieve as optimal a framework as possible, removing unnecessary complexity and thereby reducing risk of failure, we will employ state-of-the-art project management tools. The key funded activities will involve working groups (primarily online, to maximise participation), co-developing our theory of change with representatives of all relevant stakeholder groups. In addition, early on we will have a full-day in-person workshop with key partners to develop the tools and approaches for these online workshops, including developing a framework for the theory of change, plus an in-person wrap-up meeting. Further, we aim to have an interactive website with a set of webinars, and a social media presence, to improve understanding of the principles of, and need for, biodiversity credits for non-experts. Thus, we will ensure the innovations that NERC and ESRC are funding are functional and taken up by relevant stakeholders.

Ultimately, we aim to deliver a framework for tradable biodiversity credits, developed by UK science in partnership with industry, to allow the release of private finance for biodiversity conservation nationally and globally. This is necessary if we are to have any hope of closing the $600-800 billion a year funding shortfall identified by the Global Biodiversity Framework, relative to what is needed to meet the targets for slowing extinction rates.