The European Union has been encouraged to amplify efforts in developing a biodiversity credit market, which could significantly drive investments towards biodiversity-rich, low, and middle-income countries (LMICs). This recommendation comes from the high-level expert group on sustainable finance (HLEG), which emphasises the market's potential to bolster natural capital investments.
Iberian lynx in its natural habitat. AI generated picture.
Released in April 2024, the HLEG's final recommendations highlight the need for this market as current carbon markets often lack viability for directing funds towards biodiversity conservation, particularly in LMICs. Despite the expansion of carbon markets in Asia and Latin America, challenges such as regulatory weaknesses and transparency issues have impeded progress.
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The group suggests that biodiversity finance offers a valuable alternative, proposing the creation of internationally recognised biodiversity credits and pricing mechanisms. Moreover, they urge the adoption of regulatory and integrity safeguards to ensure market effectiveness and prevent greenwashing.
Despite the EU Commission's support for the recommendations, they do not signify an official stance or commitment yet. Concerns persist regarding the additionality criteria, which might exclude certain conservation projects from qualifying for biodiversity credits, thereby necessitating other support mechanisms.
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Looking ahead, the HLEG proposes exploring additional methods such as the 'landscape approach' and leveraging capital through sovereign green bonds for nature and biodiversity projects. This approach aligns with recent initiatives by the World Economic Forum and the Biodiversity Credits Alliance, aiming to build confidence in the emerging market and address associated risks.
With recent monumental shifts in the carbon market and the revolution of the application of nature credits, the time to benefit from the carbon market is now. Whether you are an investor looking to invest in green bonds that fund carbon projects, an organisation looking to measure and compensate for your carbon footprint with biodiversity credits, or an individual wishing to contribute to nature through planting trees, we have the solution for you. With DGB Group’s array of green solutions, you can take action today to make a positive environmental impact and benefit from the groundbreaking expansion of the carbon market.
Invest in nature with DGB’s biodiversity credits
