Biocredits to finance nature and people: emerging lessons

Biodiversity is degrading at alarming rates, and people living in biodiversity-rich areas often bear the heaviest costs of biodiversity loss and inequitable conservation efforts. Biodiversity credits, or ‘biocredits’, are emerging as a tradeable unit of biodiversity that can incentivise nature conservation and restoration to benefit marginalised groups living with nature. Biocredits can complement carbon credits but are most effective as their own new asset class. As a purely positive investment in nature, biocredits are distinct and are preferred to biodiversity offsets, which can cause net damage to biodiversity. Demand for biocredits is growing among private investors, individuals and governments who want to invest in the conservation and restoration of biodiversity. Biocredits supplied by Indigenous Peoples and local communities can create an innovative way to fund locally-led action. Based on a review of three existing biocredit methodologies and learning from the pitfalls of the carbon market, we describe three challenges in designing and implementing an effective biocredit market: how to rigorously and equitably measure a unit of biodiversity; how to generate sufficient demand and sales of biocredits; and how the majority of the revenue from a biocredit scheme can be channelled back to Indigenous Peoples and local communities who will create biocredits for nature and climate outcomes.

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Innovative Finance for Nature and People

Forests, particularly primary tropical forests, are critical natural capital for meeting the Sustainable Development Goals, the objectives of the Paris Climate Agreement, and the goals and targets of the Kunming-Montreal Global Biodiversity Framework, especially in ways that benefit host countries and Indigenous Peoples and Local Communities (IPLCs). The One Forest Summit in Libreville on 1-2 March 2023, co-hosted by France and Gabon, provides an opportunity to ensure that these ecosystems are safeguarded and restored for their environmental, economic, cultural, and social benefits. This report presents the state-of-play, diagnostics, and recommendations for unlocking new financial resources for the conservation, sustainable use, and restoration of biodiversity in a socially inclusive manner, with a focus on two emerging instruments: biodiversity-positive carbon credits and nature certificates.

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Biocredit catalogue: a collection of biocredit developers and schemes

The biocredit market directs finance to the conservation and restoration of biodiversity, which when designed correctly can benefit and empower Indigenous Peoples and local communities, a group which research suggests stewards upwards of 80% of the planet’s biodiversity. This catalogue identifies a selection of 11 biocredit developers and schemes currently active, with about 30 pilots under development. It is intended as a living document to support a high-integrity, scalable biocredit market, so please send feedback with any corrections or missing material.

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Custodians of nature - Placing Indigenous Peoples' and local community rights at the heart of the biodiversity credit market

The Communities Advisory Panel (CAP) was set up in 2023 to ensure that the emerging market in biodiversity credits is founded on just and equitable principles, respectful of human rights and traditional knowledge, and recognizes and builds on existing capacity. CAP is an independent, self-governed group consisting of over 40 members of Indigenous Peoples and Local Communities from the seven socio-cultural subregions of the world. CAP works to bring equity and integrity to the biodiversity credit market by: Identifying the risks and opportunities for Indigenous Peoples and Local Communities associated with biodiversity credits Ensuring Indigenous People’s and Local Communities’ rights and traditional knowledge are respected, including the right to self-determination and legal processes such as Free, Prior and Informed Consent (FPIC) Supporting funding for and building the capacity of Indigenous Peoples and Local Communities in their role as nature’s frontline stewards The current secretariat of the CAP is the International Institute for Environment and Development (IIED), with support from the Biodiversity Credit Alliance (BCA).