#23 - Biodiversity credits - the ingredients - main indicators used by BC schemes?

This twenty third issue of The Nature Intelligence Newsletter is the second of a series on the indicators & metrics used by biodiversity credit schemes.. It covers:

• a typology of biodiversity credit indicators & metrics
• an analysis of the "dishes" produced by existing schemes
• an in-depth look at the indicators, metrics, units and MRV methods of existing schemes

This series is itself part of a broader focus on biodiversity credits within The Nature Intelligence Newsletter:

1. introduction to the concept
2. buyer archetypes & associated controversies
3. use cases, market size and demand
4. counterbalancing impacts & ecological equivalence
5. lessons & key differences of 4 schemes
6. 4 issues you need to know about
7. market & price trends
8. the cooking analogy

The next issue will delve into the recipe of 13 leading schemes.

Reminder: the cooking analogy and the analysis of 34 schemes and 140 indicators

This second episode of a trilogy on the work we conducted with Simas Gradeckas from Bloom Labs will provide an in-depth analysis of the ingredients used by biodiversity credit schemes.

If you are not familiar with this concept of "ingredients" or the whole cooking analogy we developed with Simas, I strongly suggest you read the first episode.

Categorizing indicators in line with existing frameworks

The subsequent sections will talk a lot about ecosystem condition (read more about it), species and weighted-ecosystem extent. Where do those categories come from?

As I highlighted in my newsletter taking stock of COP16's outcomes, those categories may be an efficient way forward to standardize biodiversity credit measurement and align it with negative impact measurement (and the aspects of biodiversity which should be measured). Not by converging on a single metric, but rather by speaking the same language and identifying credits which are "condition-adjusted areas" and those that are "species-weighted ecosystem extent".

Buyers of biodiversity credits can then better understand what are behind each credit and find ones covering aspects of biodiversity they value.

Ingredients used by current biodiversity credit schemes

We applied this typology to the 140 indicators used by existing schemes and classified the "dishes" produced by those ingredients (reminder of the link between ingredients & dishes here).

That revealed a landscape with 3 main types of schemes.

Dissecting the indicators used by current schemes: what have learned?

For each of the scheme listed in the Venn diagram from the previous section, we assessed in details the indicators (number, category, etc.), metrics, units and MRV methods involved.

Overall, measuring gains (or avoided losses) of biodiversity put the assessor in front of 3 main objectives:

1. Robustness: measurement should be accurate, granular and comprehensive
2. Ease of measure: measurement should be scalable (i.e. not too costly) and applicable by people with reasonable skills
3. User-friendliness: users (here buyers) should be able to quickly understand what is measured

Those 3 objectives often conflict with each other and you may achieve two at the detriment of the third.

Our analysis reveals that biodiversity credit schemes have - in aggregate - currently focused mainly on robustness and ease of measure, abandoning user-friendliness. This has led to a proliferation of 140 indicators, most used by only one or two schemes, swamping buyers.

Beyond the surface (which appears chaotic) though, there is actually convergence. Most schemes measure the same categories of elements such as Landscape, Structure or Species diversity.

Surprise - a webinar to explain it all!

I've started teasing it in recent weeks: Simas Gradeckas and me will host a webinar to present all our joint analyses on metrics & indicators and answer your questions.

Biodiversity Credits: Practical Insights on Credit Quantification and Metrics

12 December 2024 - 17:00 - 18:00 UTC+1

Register now!

Please share your thoughts in comments! And please let me know if there is a topic you'd like me to cover in the future!

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Disclaimer: all views are mine and do not represent any institution or initiative's.

Access previous issues of the Nature Intelligence Newsletter:

Case studies and examples

#01 - Impacts on ecosystem integrity of a listed equity index assessed for the first time - STOXX600

#08 - Getting inspired: 3 front-runners who assessed their biodiversity impacts at the corporate level

#09 - Ecosystem condition: direct measurement and assessment of regulatory offsets

Ecosystem condition definition and metrics

#02 - All you ever wanted to know about the MSA

#03 - Ecosystem condition: the indicator to watch for corporate biodiversity performance

Biodiversity measurement tools

#04 – Differences between the corporate biodiversity metrics

#05 - Charting path: navigating the biodiversity tool wilderness - part 1 - The compasses

#06 - Charting path: navigating the biodiversity tool wilderness - part 2 - The map

#07 - Charting path: navigating the biodiversity tool wilderness - part 3 - Tools for financial institutions

Biodiversity credits

#10 - Biodiversity credits: definition and main actors

#11 - Biodiversity credits: uncovering the use cases

#12 - Biodiversity credits: deep-dive on use cases, demand and market size

#13 - Biodiversity credits: counterbalancing impacts with clear ecological equivalency rules

#15 - Biodiversity credits: lessons & key differences of 4 leading schemes

#16 - Biodiversity credits: 4 issues you need to know about

#17 - Biodiversity credits trends: market & price

#20 - Biodiversity credits: the cooking analogy - understanding indicators

Align

#14 - Align - Best practices for biodiversity measurement & compliance of existing tools

The Ecosystem Condition Protocol (EC Protocol)

#18 - The Ecosystem Condition Protocol: introduction, needs, goals and linkages to other frameworks

#19 - The Ecosystem Condition Protocol: the what and how of this missing piece of the corporate biodiversity puzzle

COP16

#21 - COP16 - intro, disappointments and hopes

#22 - COP16 - progress on metrics, biodiversity credits, IP, DSI; failure on financing & monitoring

Credits: the cover of this issue was made using Bing Copilot Designer.