Environment Bank launches new biodiversity credits

Environment Bank aims to complete 6,000 acres of habitat creation in the UK this year, with other additional projects in progress.

Environment Bank is aiming to provide fully-funded sustainable investments to reshape the valuation, pricing, and market risk of global nature investments for the private sector.

It has set aside $300m of its own funding for the new credits, badged as the first of their kind, and is seeking partners to scale the credit scheme.

Under the new Taskforce on Nature-Related Financial Disclosures’ (TNFD) framework, businesses are being encouraged to establish science-based nature targets and effectively integrate considerations related to nature risk in their strategic plans. They are also being urged to disclose all impacts, risks and dependencies relating to nature across their entire value chain.

As the recognition of nature’s crucial role in achieving net-zero targets continues to grow within the private sector, Environmental Bank has introduced the sale of its biodiversity credits.

Environment Bank aims to complete 6,000 acres of habitat creation in the UK this year, with other additional projects in progress.

By 2025, it plans to restore an area equivalent to the size of Manhattan in England, collaborating with local partners to rebuild ecosystems, including grasslands, woodlands, wood-meadow-scrub-grassland mosaics, and wetlands.

It is now offering businesses the chance to buy new credits related to these schemes.

Environment Bank’s chief executive officer James Cross said: “Environment Bank’s Biodiversity Credits mark a new value proposition for the private sector to support nature uplift across ecosystems, removing the barriers that have historically existed in biodiversity investments.

“Scalable and impactful delivery of nature restoration projects will be key to tackling climate change, and the private sector has a huge role to play. Biodiversity Credits will make nature economically viable. We do not get to net-zero without nature, and it’s time to put repairing the planet first on the agenda.”

Earlier this year, the UK Government announced that developers will need to achieve 10% biodiversity net-gain at all large domestic, commercial and mixed-use sites from November.

While in specific cases, the Government has agreed to permit developers to attain net-gain off-site through biodiversity credits, this approach is to be considered a last resort.

Credibility concerns

Biodiversity credits can sometimes be seen as a way for companies to “offset” their environmental impacts, leading to questions about whether they genuinely contribute to conservation or merely provide a green image.

Earlier this year, The Guardian conducted an investigation that found 90% of Verra’s rainforest carbon credits to be “worthless”. While Verra disputed the investigation’s methods, it committed to revamping its rainforest credit program by mid-2025.

Additionally, a recent study by UC Berkeley and Carbon Market Watch highlighted a significant gap in the effectiveness of carbon prevention and removal efforts in various forest projects. The study determined that only one in every 13 credits truly delivers a net benefit in terms of climate impact and community benefits.

This underscores the need to ensure the credibility and transparency of the market for biodiversity credits to prevent misleading claims and greenwashing.