Nature Credit Markets

Protecting nature is imperative for our future — but current finance flows are insufficient to sustain it. “Nature credits” could unlock a much-needed source of funding to restore nature for the benefit of humanity.

The challenge

Our lives depend on nature, yet global biodiversity is under threat, with 1 million wildlife species considered at risk of extinction. The continued destruction and degradation of nature puts human lives and livelihoods at risk. Meanwhile, efforts to protect nature, and by extension, the services that it provides — including a stable climate and fresh water — are underfunded.

What are nature credits?

Nature credits, also called biodiversity credits or certificates, seek to finance nature and support a shift to sustainable (“nature-positive”) economies. Nature credits represent a comparable, measured and evidence-based unit of positive biodiversity outcomes from nature restoration, conservation and stewardship activities. Credits could contribute to a company’s nature-positive strategies; mitigate risks resulting from reliance on nature; or contribute to countries’ national biodiversity targets.

How could they work?

Well-governed and equitable nature credit markets present an opportunity to explicitly value the contributions of nature and in their totality:

• facilitate business activity toward nature-positive outcomes;
• increase investment access and confidence in high-integrity nature opportunities by distributing the costs of restoration and conservation through a unitized credit and providing a level of outcome assurance through measurement, reporting and verification;
• fairly reward those stewarding nature, particularly Indigenous Peoples and local communities; and
• support the transition to nature-positive economies and the recognition of nature as an asset.

What are the risks?

Nature credit markets are complex and carry risk that must be acknowledged and addressed. As the markets form, all market actors must ensure that:

• The rights, visions and ancestral livelihood practices of Indigenous Peoples and local communities are recognized, safeguarded and respected, and traditional knowledge is incorporated;
• Inclusive governance and capacity building is supported and barriers to participation minimized so that Indigenous Peoples and local communities can equitably benefit;
• The different requirements and roles of governments are recognized so the potential of these markets aligns with national and international policy contexts and is underpinned by effective governance;
• These markets drive net-positive outcomes for nature and people; help protect against further biodiversity impacts and loss and represent new and additional sources of finance and income for nature and local communities;
• Lessons learned from carbon markets and biodiversity offsets are incorporated across all aspects from governance and monitoring to rights and safeguarding; and
• We collaborate, act with speed and agility, are transparent, learn quickly from mistakes, and adapt.

Our approach

Conservation International believes nature credit markets have the potential to be a valuable, additional and complementary tool for closing the nature finance gap. Our objective is to catalyze and shape high-integrity and equitable nature credit markets that deliver new finance that supports net-positive and lasting outcomes for nature and people and the transition to nature-positive economies.

Our strategy toward high-integrity, equitable and durable nature credit markets couples high-integrity demand with high-integrity supply, underpinned by effective governance, participation of Indigenous Peoples and local communities, and robust science enabled through technology. This will be facilitated by partnerships across all strategy levers and enabled through place-based market pilots that provide a safe space for collaboration and experimentation from which all market actors can learn.

We are optimistic about the potential of these markets, and recognize while they are developing, there is a need to lean into challenging conversations, monitor progress, adapt our approach and act with courage if the trajectory of market development does not align with our objectives and principles.