Developing a new co-designed decision support tool for biodiversity credits and investment

Working with industrial and third sector partners, this project will support the development of the world's first biodiversity credit standard (i.e. core environmental, social and governance requirements biodiversity projects must meet to become certified).

Recent and upcoming legislation in the UK, EU and elsewhere is introducing greater requirements for organisations of many types to report on the effects of their activities on both carbon and nature. There is also rapidly increasing private-sector interest in nature conservation as part of corporate social responsibility, positive publicity, etc. These trends, plus various natural capital impact assessment schemes being developed, are creating a large demand for biodiversity credits, but no biodiversity credit standard exists yet. Analogous to carbon credits, biodiversity credits assign investable and tradeable economic value to biodiversity, for example allowing a landowner to raise finance (based on forecast biodiversity uplift) to fund nature conservation on their land.

This project co-designs a Biodiversity Credit Tool (BCT) with multiple stakeholders. It centres on a partnership between two charities (Wallacea Trust - conservation; Plan Vivo - standards and certification) that have signed a Memorandum of Understanding to develop a biodiversity credit standard, and have already received a large amount of interest (see Beneficiaries). The project PI is in the Biodiversity Uplift Methodology Working Group (meeting since mid-2021) and has been selected as the only academic on the Biodiversity Standard Working Group (BSWG), starting in 2022, and also to Chair the upcoming Technical Advisory Committee (TAC). The current academic literature on standards development and commensuration challenges in environmental contests tends to be retrospective. This project provides a rare opportunity to observe tensions and equivocality emerging between scientific and different stakeholders goals in practice. This will improve understanding of decision making in biodiversity economics.

The Coalition for Private Investment in Conservation's 2021 Conservation Finance report shows very rapid growth in private-sector biodiversity funding: from US$2 billion in 2016 to $18 billion in 2020. Remarkably, the report concludes that the growth rate could be considerably higher, but is held back by lack of appropriate methods for quantifying biodiversity. Our current NERC-ESRC project aims to provide a synthesis of methods to quantify biodiversity for potential use in biodiversity valuation and trading. That synthesis is informing project partner Plan Vivo's ongoing development of the methodology for its biodiversity standard. A key part of our proposed project is to rigorously field-test shortlisted options for this biodiversity quantification.

Once the standard is launched, we will work with our stakeholders to improve it, and develop tools to implement it. The stakeholders have already produced an early draft of documentation for applying for biodiversity credits, and invited 10 of the many interested organisations to use it to put in pilot applications. These pilots (from 8 countries in 5 continents; see Track Record) will be processed iteratively, learning from the experience and from our stakeholder and field research to improve the standard and its workflows before full roll-out.

The biodiversity quantification method being proposed for the credit standard requires field sampling and significant cost for project applicants (reflecting the difficulty of measuring biodiversity for economic valuation). In the later stages of the project - once that method has been developed - we therefore aim to develop tools to help select the most appropriate sites for biodiversity uplift projects.

Overall, our project represents a synergy of fundamental academic questions addressed as part of delivering on a stakeholder-led initiative with high expected impact.