Will a voluntary ‘nature credits' market really help biodiversity?
The idea is for businesses to fund conservation projects and benefit from the eco-friendly association. The government sees potential and wants to get involved, but how much difference can such a scheme actually make?
Late last week, associate minister for the environment Andrew Hoggard announced the government was 'supporting the expansion of the voluntary credits nature market [sic]'. Details were scarce on what the government's role would be, but in a press release, Hoggard said, 'We want to connect those caring for the land with investors who support conservation. Nature credit markets help fund trusted environmental projects that actively protect and restore ecosystems.'
The press release mentioned nine voluntary nature credits market pilots, conservation projects such as restoring exotic forestry or farmland to native bush. One of those is a partnership between Sanctuary Mountain Maungatautari, a Waikato wildlife reserve that has struggled with funding issues, and environmental financing business Ekos, which began in 2022. 'This represents a significant move away from reliance on traditional grant funding and towards private sector investment to support New Zealand's biodiversity future,' said Sanctuary Mountain Maungatautari CEO Helen Hughes in response to Hoggard's announcement.
Hoggard suggested the voluntary nature credits market would act as an alternative to the SNA (Significant Natural Areas) framework of the National Policy Statement on Indigenous Biodiversity, following the government's 2024 suspension of the requirement for councils to map SNAs on private land, a move that was widely criticised. 'Farmers and other private landowners are doing their part to protect native biodiversity and want to do more. Supporting voluntary natural credits markets is a chance for the government to show them the carrot, not just the stick,' said Hoggard. 'We will test the role for government which may include setting principles, and a framework for standards, to build market confidence and ensure quality.'
So what are 'nature credits' or 'biodiversity credits'? The concept is based on the existing 'carbon credits' market. Under that framework, businesses that wish to recognise the CO2 they emit into the atmosphere that is otherwise difficult to immediately address can voluntarily buy carbon credits as a contribution to climate action. The money from buying carbon credits goes towards environmental projects that remove or mitigate the release of CO2. Voluntary credits can be configured in different ways, and include nature and other co-benefits which are recognised in the price per tonne of CO2 of the credits.
Biodiversity credits are similar, but instead of offsetting actions that have negative effects on the environment, they seek to provide an opportunity for businesses to finance positive environmental action. A large barrier to lasting conservation action is money. Planting trees, pest control and protecting wildlife comes at no small cost, and these efforts need to be financed somehow. Introducing: biodiversity credits. To generate a biodiversity credit, actions need to be undertaken that demonstrably improve biodiversity, and by investing in biodiversity credits and financing such activity, businesses can associate themselves with an eco-friendly image.
But how much difference do biodiversity credits actually make? Many concerns with the concept of biodiversity credits stem from existing issues within the voluntary carbon credits markets. Far too often carbon credits have been sold to finance environmental efforts that have little real effect on the environment, meaning that businesses get all of the positive publicity for helping the environment, without properly addressing the negative climate impacts of their company. Some criticise carbon credits as a 'pay-to-win' system, allowing businesses to just throw money at the climate crisis and engage in greenwashing – pretending to be an eco-friendly company before actually doing anything positive for the planet. The biodiversity credits system presents a similar risk if not regulated properly. Businesses could generate credits without having a measurable impact on the environment, stagnating environmental action.
In comments made via the Science Media Centre, Sebastian Gehricke, a senior lecturer in finance and director of the Climate and Energy Finance Group at the University of Otago, echoed this concern. 'The global voluntary carbon credit markets face significant scrutiny around the credibility and integrity of credits,' he said. '[As] we're still grappling with the complexities of carbon, something comparatively easier to quantify, then I am really concerned about applying similar models to nature and biodiversity, which are far more complex to quantify and very context dependent.'
While Forest & Bird cautiously welcomed Hoggard's announcement, saying it was a 'useful step' that would 'help support people and organisations who wish to voluntarily invest in biodiversity', the potential for greenwashing was also a concern. 'We need to ensure that any external biodiversity incentive system has high integrity and is sustainable – that real, enduring outcomes for nature are achieved and it is not used to mask environmental damage,' said Richard Capie, Forest & Bird's group manager for conservation advocacy and policy.
Gehricke was sceptical of the lack of detail in Hoggard's announcement of what the government actually plans to do. 'It appears the government is indicating potential future involvement in a market that private actors are already working to develop. This isn't so much a clear incentive as it is a signal of interest,' said Gehricke. 'Shifting focus toward a voluntary credit market, which is still in its early stages, risks diverting attention from the more immediate and proven impact of regulatory protections.'
The broader policy context was important, he said, pointing to the SNA suspension referenced in the press release and other 'significant climate and environmental protection policies' the government had 'recently rolled back'. 'Making a statement of vague support for a 'nature credit market' does not compensate for the tangible loss of safeguards that were already in place, and which many experts already considered insufficient.'
Similarly, Green Party agriculture spokesperson Steve Abel called the nature credits announcement 'a bandaid on a gaping wound'. 'While credit schemes and covenants are an important pathway to protecting vital biodiversity on farmland, these alone are not nearly enough to address the biodiversity crisis in Aotearoa,' he said. 'One tiny step in the right direction does not make up for the significant damage this government is doing to the environment in many ways.' He also expressed concern that 'market and corporate-driven biodiversity credits can be little more than a greenwashing tool – and there's proven to be very little demand without regulatory requirements for them'.
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'One of the key questions we've always had is, you know, who is going to buy these things, and what do they want to buy?' Ekos' Sean Weaver said his scheme ultimately wants to attract foreign revenue to New Zealand which is seen as a hotspot for biodiversity. 'Imagine going to Europe and lassooing, I don't know, 10,20,30,40 hundred million dollars worth of demand from big actors in those economies so that we can create a fire hose of money to point at New Zealand conservation interests. That's really the goal here.' Greenwashing, commodifying nature? But what about criticism the credits could be another vehicle for greenwashing – companies exaggerating or misleading consumers about their green credentials? The integrity of biodiversity schemes is key, given the world's chequered experience with carbon trading. 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"We want to connect those caring for the land with investors who support conservation." This week, Christchurch-based business consultancy Ekos launched its own biodiversity credit scheme, BioCredita, where investors can purchase bundles of credits to fund nature projects, including Sanctuary Mountain Maungatautari, a fenced eco-sanctuary in Waikato. The project, covering 3363 hectares, costs $5000 daily to run and is hoping to fund operations through credits or units priced at $12 each, representing the cost of protecting one hundredth of a hectare. The first buyer, according to Ekos' chief executive Sean Weaver, is a window manufacturer "who liked the idea of selling biodiversity-enriched windows". "They can't do much biodiversity conservation in the factory, but they can support a nearby project, which is what they've done," Weaver told Country Life. Follow Country Life on Apple Podcasts, Spotify, iHeart or wherever you get your podcasts. The Ekos credits are measured, independently verified and registered, and the project monitored to ensure operators do what they say they're doing, Weaver said. "We've built a standard called the Ecos SD standard, which defines all of the things you need to do in order to demonstrate the benefits that you're delivering. And then we've built a registry, a digital registry on blockchain technology, so that these units can be issued once they've been verified to the standard, and then they can be tracked and traced across." Weaver stresses the credits, unlike carbon credits, are not for use to offset damage to the environment. The Maungatautari project is among several pilot projects which the government is hoping to learn from. Others include a Silver Fern Farms project and Te Toa Whenua Northland which is transitioning around 100 ha from exotic forestry to native trees and includes pest control on iwi-owned land. Foreign funding for local projects A voluntary biodiversity credit market is just another tool for companies, both here and overseas, which want to fund New Zealand's conservation efforts, according to Hayden Johnston, GM for the Natural Environment at the Ministry for the Environment. "We know that in New Zealand, companies are spending in the millions of dollars each year to keep up with either their regulatory requirements or claims that they want to make about their brands. "I think people see New Zealand as a ... country that has high credibility in the international space, and I feel really confident that we could be creating some really high-end premium products or credits to be offered internationally. "One of the key questions we've always had is, you know, who is going to buy these things, and what do they want to buy?" Ekos' Sean Weaver said his scheme ultimately wants to attract foreign revenue to New Zealand which is seen as a hotspot for biodiversity. "Imagine going to Europe and lassooing, I don't know, 10,20,30,40 hundred million dollars worth of demand from big actors in those economies so that we can create a fire hose of money to point at New Zealand conservation interests. That's really the goal here." Greenwashing, commodifying nature? But what about criticism the credits could be another vehicle for greenwashing - companies exaggerating or misleading consumers about their green credentials? The integrity of biodiversity schemes is key, given the world's chequered experience with carbon trading. Already critics are flagging concerns around the nascent biodiversity credit industry, not just greenwashing - but scaleability, distaste at the "commodification" of nature and the risk of distracting governments from their funding obligations. Johnston said the government hopes to develop "guardrails" by following the pilot projects' experience. "Principles like transparency, so that the buyer knows exactly what they're buying; additionality, so that what they're buying is clearly an additional benefit from what would have happened otherwise; longevity, so that the action or the outcome will occur over a longish period of time." A central registry for the credits is something they will be considering too, he said. Weaver describes credits as a variation on philanthropy. "Are they commodifying nature? No, they're not. They're commodifying the human labour and technology cost to look after nature. So no nature is being traded in these credits." It's not a goldrush Johnston said biodiversity credits could work well for farmers and landowners working collaboratively, say, in catchment groups, to fund things like fencing and pest control. "One of the things I'm really keen we test is how you can do this in a way that is cost effective. "We know that examples of projects that are using international verification, for example, can be quite costly, and we want to find ways to make this an available tool in New Zealand for New Zealand circumstances." Weaver said the Ekos credits, which are tradeable, should not be seen as a goldrush, but essentially a form of sustainable financing. "Everybody in the value chain, in our programme has to make a profit, but nobody is allowed to make a super profit, like an unjustifiable super profit. "The main reason for that is that the end-user of biodiversity credits is buying a conservation outcome, and they want to be confident that they're funding the true cost of looking after the place, and not funding, you know, somebody's super profit that will help them just buy another yacht." "Projects still need to go out and hunt for buyers, and our system is a new net to go fishing for that money," Weaver said. Learn more:
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Photo: RNZ/Sally Round If mud and dead things aren't your thing but you still want trees planted, pests killed and wetlands to flourish, you could pay others to do the hard slog through biodiversity credits. Not to be confused with carbon credits, they are a way for private investors and corporations to pay others to save the skink or clean up sludgy streams and, in so doing, meet the expectations of a company's increasingly green customers. A biodiversity credit market is something the government has been perusing for a few years now , given limited public funds to pay for the huge costs involved in protecting and restoring nature. At Fieldays this month Associate Minister for the Environment Andrew Hoggard said farmers and other landowners were already doing their bit to protect biodiversity and wanted to do more. "Supporting voluntary nature credits markets is a chance for the government to show them the carrot, not just the stick. "We want to connect those caring for the land with investors who support conservation." Bunker, one of four male kākāpō, moved to Sanctuary Mountain Maungatautari in 2023. Photo: Supplied / Jake Osborne This week, Christchurch-based business consultancy Ekos launched its own biodiversity credit scheme, BioCredita, where investors can purchase bundles of credits to fund nature projects, including Sanctuary Mountain Maungatautari , a fenced eco-sanctuary in Waikato. The project, covering 3363 hectares, costs $5000 daily to run and is hoping to fund operations through credits or units priced at $12 each, representing the cost of protecting one hundredth of a hectare. The first buyer, according to Ekos' chief executive Sean Weaver, is a window manufacturer "who liked the idea of selling biodiversity-enriched windows". "They can't do much biodiversity conservation in the factory, but they can support a nearby project, which is what they've done," Weaver told Country Life . Follow Country Life on Apple Podcasts , Spotify , iHeart or wherever you get your podcasts. The Ekos credits are measured, independently verified and registered, and the project monitored to ensure operators do what they say they're doing, Weaver said. "We've built a standard called the Ecos SD standard, which defines all of the things you need to do in order to demonstrate the benefits that you're delivering. And then we've built a registry, a digital registry on blockchain technology, so that these units can be issued once they've been verified to the standard, and then they can be tracked and traced across." Weaver stresses the credits, unlike carbon credits, are not for use to offset damage to the environment. Pest control in native forest Photo: RNZ/Sally Round The Maungatautari project is among several pilot projects which the government is hoping to learn from. Others include a Silver Fern Farms project and Te Toa Whenua Northland which is transitioning around 100 ha from exotic forestry to native trees and includes pest control on iwi-owned land. A voluntary biodiversity credit market is just another tool for companies, both here and overseas, which want to fund New Zealand's conservation efforts, according to Hayden Johnston, GM for the Natural Environment at the Ministry for the Environment. "We know that in New Zealand, companies are spending in the millions of dollars each year to keep up with either their regulatory requirements or claims that they want to make about their brands. "I think people see New Zealand as a ... country that has high credibility in the international space, and I feel really confident that we could be creating some really high-end premium products or credits to be offered internationally. "One of the key questions we've always had is, you know, who is going to buy these things, and what do they want to buy?" Ekos' Sean Weaver said his scheme ultimately wants to attract foreign revenue to New Zealand which is seen as a hotspot for biodiversity. "Imagine going to Europe and lassooing, I don't know, 10,20,30,40 hundred million dollars worth of demand from big actors in those economies so that we can create a fire hose of money to point at New Zealand conservation interests. That's really the goal here." But what about criticism the credits could be another vehicle for greenwashing - companies exaggerating or misleading consumers about their green credentials? The integrity of biodiversity schemes is key, given the world's chequered experience with carbon trading. Already critics are flagging concerns around the nascent biodiversity credit industry, not just greenwashing - but scaleability, distaste at the "commodification" of nature and the risk of distracting governments from their funding obligations. Johnston said the government hopes to develop "guardrails" by following the pilot projects' experience. Tree planting in QEII forest Photo: RNZ/Sally Round "Principles like transparency, so that the buyer knows exactly what they're buying; additionality, so that what they're buying is clearly an additional benefit from what would have happened otherwise; longevity, so that the action or the outcome will occur over a longish period of time." A central registry for the credits is something they will be considering too, he said. Weaver describes credits as a variation on philanthropy. "Are they commodifying nature? No, they're not. They're commodifying the human labour and technology cost to look after nature. So no nature is being traded in these credits." Johnston said biodiversity credits could work well for farmers and landowners working collaboratively, say, in catchment groups, to fund things like fencing and pest control. "One of the things I'm really keen we test is how you can do this in a way that is cost effective. "We know that examples of projects that are using international verification, for example, can be quite costly, and we want to find ways to make this an available tool in New Zealand for New Zealand circumstances." Weaver said the Ekos credits, which are tradeable, should not be seen as a goldrush, but essentially a form of sustainable financing. "Everybody in the value chain, in our programme has to make a profit, but nobody is allowed to make a super profit, like an unjustifiable super profit. "The main reason for that is that the end-user of biodiversity credits is buying a conservation outcome, and they want to be confident that they're funding the true cost of looking after the place, and not funding, you know, somebody's super profit that will help them just buy another yacht." "Projects still need to go out and hunt for buyers, and our system is a new net to go fishing for that money," Weaver said. [LI Read submissions and discussion paper on a biodiversity credit system for NZ here.
