Biodiversity offsets: voluntary and compliance regimes
“Biodiversity offsets” are a conservation and business tool that have arisen from regulatory requirements in a number of countries (e.g. USA, Brazil and in Europe). Biodiversity offsets are positive measurable actions undertaken to compensate for a harmful action related to project development, with the aim of redressing the balance or tipping it towards the positive. This ensures that overall there is no adverse affect or ‘no net loss’ to biodiversity. A growing number of businesses, including financial institutions, are undertaking voluntary biodiversity offsets as part of their environmental or risk management strategies. Despite the experience and benefits generated, engaging in offset activities raises a number of challenges, such as addressing the reputation problems associated with poor outcomes and metrics, the design of the offset, cost and timing, application to different business sectors, and the eventual implementation. Nevertheless, the motivations for financial institutions to engage are clear, demonstrating leadership, gaining an ability to influence the regulatory process, reducing operational risk exposure, and taking advantage of new business development opportunities.A number of initiatives are investigating these issues and are generating guidance, and in doing so are demonstrating that biodiversity offsets are not only feasible but also beneficial and contribute to long-term sustainable development.