Navigating Voluntary Biodiversity Credits: A Comprehensive Guide

Two questions decide whether voluntary biodiversity credits belong in your budget at all: are you in the statutory market or the voluntary one, and what does a purchase actually let you write in a sustainability report?

What biodiversity credits are and how they work

A biodiversity credit is a certificate representing one unit of measurable, additional and durable positive biodiversity outcome. That outcome is either an uplift, a measured improvement in habitat condition, or an avoided loss, a prevented deterioration. There is no single physical unit behind it: measuring nature combines several metrics into one number.

The Biodiversity Credit Alliance defines the attributes each credit should carry: a measurable outcome, additionality, meaning the benefit would not have occurred without the project, and a durability of at least 20 years.

Understanding how biodiversity credits work in practice means following the unit through five steps:

• Baseline measurement. An ecological survey establishes the starting condition of the site against a defined metric.
• Issuance. A standard body approves the methodology and issues credits for the modelled or measured gain.
• Registry entry. Each credit gets a serial number in a public registry, so it can be traced and cannot be sold twice.
• Verification. An independent auditor confirms at intervals that the outcome is actually being delivered on the ground.
• Retirement. The buyer retires the credit in the registry, which permanently removes it from circulation and fixes the claim to one company.

What one credit stands for varies enormously between issuers. Terrasos equates a credit to 10 square metres conserved or restored over 30 years; ValueNature assigns it to one hectare over 10 years. Comparing prices between issuers without first comparing units is meaningless.

Statutory BNG credits and voluntary credits: which one applies to you

Most search traffic on this topic comes from England, where developers must deliver Biodiversity Net Gain as a planning condition and can buy statutory biodiversity credits from the government as a last resort. If you are a developer with a planning application, that is the route, and this article is not it. If you are a company reporting under the CSRD with impacts in your supply chain rather than on a development site, you are in the voluntary market.

Assess impact first: when a credit is the wrong instrument

The mitigation hierarchy is a sequence, not a menu: avoid the impact, minimise what you cannot avoid, restore what you have damaged, and only then consider compensating for the residue. A credit sits at the bottom of that sequence. Buying one while the first three steps are untouched is the single most common mistake in this market, and it is the one an auditor will find first.

Run these four checks before you shortlist any project:

• Have you quantified where your impacts actually sit? A life cycle assessment usually shows they are in purchased commodities, not on your own land.
• Can that impact be reduced by changing sourcing or specification? If yes, the budget belongs there.
• Is the remaining impact measurable enough that you could state what you are compensating for?
• Would you be comfortable publishing the purchase alongside the impact figure it relates to?

A food manufacturer sourcing palm oil and soy, for example, will find that a deforestation-free sourcing programme moves far more biodiversity than an equivalent spend on credits. This market works today for companies in agriculture, consumer goods, infrastructure and finance that have already done the reduction work.

How to buy: standards, project checks and price ranges

Start with the standard, not the project. Credits issued under a published methodology with independent auditing, such as the Biodiversity Credit Standard or Plan Vivo, at least give you documentation to review. Then review that documentation yourself. Six points decide whether a project holds up:

• Additionality. Is there evidence the site would have been degraded or left unrestored without this funding?
• Measurement method. Which metric, measured by whom, and is the baseline survey attached or only summarised?
• Permanence. How long is the outcome contractually secured, and what happens if the landowner sells?
• Registry entry. Is the credit serialised in a public registry with a retirement record you can link to?
• Double counting. Is the same hectare also generating carbon credits or a statutory offset elsewhere?
• Rights-holder consent. Is there documented free, prior and informed consent from the communities managing the land?

Prices vary by an order of magnitude, indicatively from around 50 to over 500 US dollars per credit, and the number on its own tells you very little. What moves it:

What a purchase lets you claim under ESRS E4

This is where most buyers get into trouble. Under ESRS E4 you disclose your impacts, dependencies, targets and actions on biodiversity. A credit purchase is an action. It is not a reduction in your impact, and reporting it as one misstates your position.

Wording that survives review: "we funded the restoration of X hectares through verified biodiversity credits, retired in registry Y, alongside a reduction of Z in our own footprint." Wording that does not: "biodiversity neutral", "nature positive" as a company-level label, or anything implying the credit cancels a specific impact. Voluntary credits are contributions, not compensation, and green-claims rules are tightening.

My position: for most companies I work with, the honest answer is that the credit budget is premature. Fix the materiality assessment and the supply chain data first. A credit bought before you can name the impact it relates to buys you a receipt, not a result.

Frequently Asked Questions