UK-based Biodiversity Futures Initiative (BFI) aims to provide scientific robustness to biodiversity credit projects and certifications, so buyers have confidence in outcomes and the projects have a greater impact on nature.

The BFI is positioning itself to be a scientific auditor as part of certification processes, meaning that the buyer is not required to take a “leap of faith”. The organisation will peer-review biodiversity credit project data at their inception and throughout their lifespan.

“Peer review in academia has its challenges but the process has successfully underpinned scientific research for hundreds of years. It’s quite surprising that something similar hasn’t emerged for the carbon and biodiversity markets,” said Dan Exton, vice chair of the BFI.

“When you’re trying to get corporates to put large amounts of money towards it, they want reassurance that the money is going to high-quality projects.”

The organisation is currently attached to the Wallacea Trust methodology for measuring biodiversity credits. However, Exton said that BFI is agnostic on the biodiversity credit methodologies that could use their scientific audit service.

In the long term, the organisation wants to enable other methodologies to use their service, but this step requires the publication of methods before they can be adopted into BFI, Exton told Carbon Pulse.

BFI’s scientific auditing ensures that the biodiversity certification bodies and emerging methodology are built on trusted science expertise, Exton said.

“It’s unrealistic to expect certification bodies to have in-house expertise required to assess a coral reef project one day, and a tropical forest project the next.”

For biodiversity credits to get off the ground, and avoid the recent challenges of the voluntary carbon market, several stakeholders such as BFI contend that scientific auditing by third parties can reduce the risk on certification bodies.

Certification bodies are arguably not always truly independent, with their income being provided based on the number of credits issued, leading to perverse incentives to over-credit, Exton said.

APPROACH

The BFI has a two-stage approach. In stage one, a review panel examines the metrics and methods used to calculate biodiversity baselines and monitor credit outcomes. Projects could be rejected, with expected improvements, or approved at this stage.

A review panel would look to ensure developers are not selectively choosing metrics in order to get the biased well-performing data, Exton said. The process could be used by developers without in-house expertise as a way to get advice from academics to strengthen the project design.

Once projects have been established, they would enter stage two by submitting raw monitoring data to BFI who could then confirm the biodiversity uplift for a project. BFI would approve, amend, or reject applications based on whether the data matches what is being claimed, or fails to meet the mark.

Stage two is a continuous cycle of resubmission based on the methodologies that BFI will use, with projects resubmitting data throughout its lifecycle, Exton said.

Costs for project developers include £2,000 for a stage one project review, completed within three weeks. A second stage review is more intensive with in-depth data reconstruction that follows the peer-review process for an additional £5,000 per project.

The organisation’s core review panel, made up of eight established academics covering key ecosystem types has just been established. BFI will also recruit other academics with localised expertise to ensure they can meet the varied project requirements.

Academic reviewers will be competitively paid but not for the number of credits issued or results of biodiversity uplift in order to minimise potential perverse incentives from the approach, Exton said.

BFI is already testing its scientific review process with projects by carbon developer Replanet, where Exton is the director of strategy. If there were a project where a conflict of interest existed, Exton said would recuse himself from the process. He hoped that BFI’s transparent approach would enable market trust among the developer community.

The organisation will also publicly disclose project review reports from successful projects, as well as BFI’s results and rates of acceptance for full transparency.

ON-DEMAND

BFI is now building relationships with emerging biodiversity certification bodies to act as their independent scientific basis, so the buyer has confidence that any purchased credit is scientifically robust, as well as meets the certification conditions of permanence and additionality.

“We assumed that everything would work the same way as carbon, but now we believe that a big part of the market will be corporates that will have no desire or need to have a tangible credit, no legal requirement, but they want to use it as an accounting tool to understand the impact of that investment,” Exton said.

The initiative will be able to satisfy corporates on measurable and robust biodiversity outcomes through their corporate social responsibility (CSR) investments, without going down the accreditation route, said Exton.

Even with CSR investments into “nature-positive” initiatives, a company’s reputational risk can be affected by poor CSR projects as many customers and investors now expect outcomes to have key performance indicators rather than simply spending the money.

BFI is also in talks with several blockchain companies to provide transparency for corporates not requiring the full biodiversity credit certification, where tokens could enable them to manage and monitor their investments, but this would not be a direct replacement for certification.

“We’re seeing a lot of companies position themselves and we’re seeing some companies happy to take risks and be early adopters,” Exton said.

“However, we’re not seeing widespread readiness to put money on the table yet…There’s a realisation the co-benefit model in carbon, doesn’t work for biodiversity, you have to have a standalone biodiversity credit or we might as well give up on nature now.”

BFI expects the pilot projects to come through first peer review within the next six months.

By Tom Woolnough – tom@carbon-pulse.com

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