UK-headquartered conservation company Environment Bank is marketing voluntary biodiversity credits through a “biodiversity equity shares” system to encourage demand, an executive has said.
Biodiversity equity share buyers will receive data on biodiversity credits along with other conservation benefits for carbon, water, and social, according to the company’s ecology director Emma Toovey.
The firm is selling shares rather than outright credits “because there’s so much noise in this space”, Toovey told Carbon Pulse.
“There are so many emerging different methodologies. All of them saying they are the highest integrity, the best available,” she said.
“We didn’t want to create inertia in the market. That would mean that an organisation wouldn’t buy credits because they were worried about picking the wrong approach, the wrong brand.”
The biodiversity equity shares system enables corporates to purchase conservation benefits now, she said.
IN DISCUSSION WITH BUYERS
Environment Bank announced it was marketing biodiversity credits from a pilot during New York Climate Week.
The pilot is a 1,200-acre site at an undisclosed site in south England that aims to turn previously arable land into a “mosaic of thriving habitats”.
Environment Bank has not yet sold any biodiversity equity shares but is in “deep discussion” with potential UK-linked corporate buyers, Toovey said. These companies are mostly connected to agriculture, such as supermarkets, in addition to some financial institutions, she said.
The cost of each transaction, which she could not currently disclose, will vary depending on the needs of the buyer, she said. “Our buyers recognise that to get high integrity they have to pay a price.”
The cost depends on how buyers want their conservation benefits to be reported, she said.
For those prepared to pay the most, Environment Bank is building a digital platform that can show, almost in real time, elements supported by the transaction such as the number of butterflies or the amount of carbon sequestered, she said.
A NETWORK OF BIODIVERSITY PROJECTS
Environment Bank hopes to launch another biodiversity credit project outside of England in a year, Toovey said.
The size of the next project she could not yet disclose, but said that “as we move overseas, we’ll be looking at different kinds of scale”, as the initial 1,200-acre area is small compared to global nature-related initiatives.
The south England pilot is the first in a global network the firm aimed to create, Toovey said last month.
Asset manager Gresham House has funded the 30-year pilot for the entire period, she said. When the pilot ends, Environment Bank hopes to organise another 30-year agreement with a financial instrument capitalising on the increased value of the land.
NATURE UPLIFT
Environment Bank has built a framework with an unnamed third party to assess biodiversity uplift in the site, Toovey said.
The company uses “the best bits” of the UK’s biodiversity net gain metric, based on habitat condition, to show how an area improves biodiversity over 30 years. It combines this with other metrics such as species abundance and richness.
NatureMetrics will support Environment Bank in monitoring changes to biodiversity every year, she said.
Other benefits to areas such as social issues will be combined into a broader “natural capital accounting assessment” of the project, she said. For example, this might include the number of local people employed by the site.
By Thomas Cox – t.cox@carbon-pulse.com
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