Wednesday, 20 August 2025
Biodiversity credits designed to incentivise the conservation and restoration of natural habitats need better transparency and regulation to be effective and credible.
A new study by scientists from the University of Nottingham’s School of Geography has assessed 11 major biodiversity credit suppliers against six integrity criteria defined by the International Advisory Panel on Biodiversity Credits (IAPB). Results show an average score of 2 out of 3, with notable weaknesses in verifiable outcomes, particularly relating to the independence of third-party validation and verification, and transparency in risk disclosure. The results have been published in Proceedings of the Royal Society B.
Biodiversity credits are generated when measures of positive biodiversity outcomes are verified. When these credits have been properly validated and verified, biodiversity credits represent the evidenced addition (or avoided loss) of biodiversity that resulted from a restored (or conserved) site.
Biodiversity credits aim to mobilise conservation finance by quantifying and trading measurable biodiversity gains. However, attempts to model these credits similar to carbon markets with a single unit face major limitations due to biodiversity’s multidimensional and context-dependent nature. Over-standardization risks stripping ecological complexity and intrinsic value, while excessive detail can make metrics impractical for market use.
Rather than pursuing a single universal biodiversity metric, the authors advocate focusing on harmonizing data collection and processing protocols across projects. This would allow for flexibility in metrics while ensuring datasets remain comparable, transparent, and usable, minimizing confusion across diverse metrics in different scales and different methodologies. However, such an approach requires transparent governance based on high integrity.
Major international bodies like the International Advisory Panel on Biodiversity Credits (IAPB), the World Economic Forum, and the UNEP-supported Biodiversity Credit Alliance recently set out guidance but the real test is turning those principles into action, and we’re not there yet.
Dr Eun Kim, lead author of this study said: “Given that the biodiversity credit market is at a critical early stage, low-integrity credits could rapidly undermine the market confidence before it gains momentum and, more importantly, risk further irreplaceable habitat loss."
We cannot afford to repeat the trial-and-error approach - the hard lessons learned from the carbon market make this clear. The stakes are too high for anything less than rigorous standards from the outset.
The paper stresses the need for systemic transparency and regulatory oversight, warning that poorly enforced regulation undermines credibility.
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More information is available from or Dr Eun Kim on Eun.Kim@Nottingham.ac.uk
Notes to editors:
About the University of Nottingham
Ranked 97 in the world and 17th in the UK by the QS World University Rankings, the University of Nottingham is a founding member of Russell Group of research-intensive universities. Studying at the University of Nottingham is a life-changing experience, and we pride ourselves on unlocking the potential of our students. We have a pioneering spirit, expressed in the vision of our founder Sir Jesse Boot, which has seen us lead the way in establishing campuses in China and Malaysia - part of a globally connected network of education, research and industrial engagement.
Nottingham was crowned Sports University of the Year by The Times and Sunday Times Good University Guide 2024 – the third time it has been given the honour since 2018 – and by the Daily Mail University Guide 2024.
The university is among the best universities in the UK for the strength of our research, positioned seventh for research power in the UK according to REF 2021. The birthplace of discoveries such as MRI and ibuprofen, our innovations transform lives and tackle global problems such as sustainable food supplies, ending modern slavery, developing greener transport, and reducing reliance on fossil fuels.
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We lead the Universities for Nottingham initiative, in partnership with Nottingham Trent University, a pioneering collaboration between the city’s two world-class institutions to improve levels of prosperity, opportunity, sustainability, health and wellbeing for residents in the city and region we are proud to call home.
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