Nature and biodiversity strategies: ‘Bio-washing’ in the corporate sphere
England’s new policy on Biodiversity Net Gain (BNG) has been introduced this February. Industries aiming to develop land will have to provide 10% net gain in biodiversity, maintained for at least 30 years. The goal? For development to contribute to nature recovery and be nature positive. It may only be a matter of time before Scotland and Wales adopt similar policies as well.
Biodiversity offsets are one of many compensatory measures for environmental damage, developed in 2004 and governed by a globally recognised framework under the Business and Biodiversity Offsets Programme (BBOP). This standard offers guidance and principles to ensure offsets work as intended, following the concept of ‘no net loss and net gain’ to biodiversity. The core principle is to follow a mitigation hierarchy that first aims to avoid any loss, then minimise, restore, or enhance habitats on-site and finally compensate damages to nature off-site (offset). This echoes the Core Carbon Principles of the Integrity Council for Voluntary Carbon Markets.
The latest development in this area is the introduction of BNG in England. Habitats are measured in units, reflecting their size, ecological significance, and their quality. When damage can’t be avoided, developers must improve the quality of the remaining habitat or create new ones, equivalent to 10% more units than the initial habitat. If on-site improvement is not sufficient, then offsets will help plug the gap.
Our economic system requires material inputs to meet demand for food, energy, and essential needs. This fundamental metabolism already carries a footprint regardless of measures taken to avoid and mitigate its impact. A study conducted to understand if large organisations such as the University of Oxford could deliver net gain in biodiversity revealed even in a heavy avoidance scenario (e.g. no meat, dairy, paper consumption, no new construction or flights, and halving resource-use for energy), 32% of their footprint still remains and requires offsets to achieve ‘no net loss of biodiversity’. Even at an ideal sustainable scale, large organisations cannot eliminate their total environmental impact. There are best case examples which highlight compensatory measures that can deliver benefits as well. Biodiversity offsets associated with the Ambatovy mine in Madagascar revealed that they avoided as much deforestation as caused by the mine.
However, just like carbon markets, offsets and the use of markets invite scepticism and claims of greenwashing to give corporations a license to damage the environment. They also lead to the commodification of nature, where a complex and rich ecosystem is reduced to a single quantitative metric to attract investment.
Decisions on what to measure often prioritise certain features of a habitat, and the private sector will ensure returns are generated in the most efficient way. This creates unintended consequences associated with arbitrarily directing investments to profitable attributes of nature.
For instance, the BNG calculation tool is based on the UK Habitat classification system. This doesn’t effectively recognise diverse mosaic habitat types which are important for invertebrate species. The policy also favours smaller, ‘good’ quality habitats for on-site improvement instead of larger, ‘poor’ quality ones. This can lead to a reduction in areas of greenspaces and isolated, less heterogenous sites. On the other hand, the enhancement (or creation) of some good condition habitats that are also technically difficult mean there is higher risk of restoring/enhancing successfully. Thus, such projects will generate lower biodiversity units following the calculation tool.
Consequently, it undervalues and disincentives developers from improving or creating such habitats. Governance is a key policy issue as well. A review of six early adopters of BNG estimated that 27% of biodiversity units were deemed to have a high risk of noncompliance due to governance gaps in monitoring and enforcing on-site habitat improvements for over 30 years. These shortfalls in resourcing and governance by local councils may undermine the current BNG policy’s effectiveness in the UK. Regulators are under-resourced, impacting on their ability to perform site visits and compliance checks. The government is funding £9 million to help local authorities and address this challenge.
Nevertheless, this mechanism is effectively trading our current habitats for "promised" ones in the future with limited assurance. It's not enough to do the right thing, it must be done the right way. Risks can be managed, but uncertainty will remain. Prioritising the most rigorous and robust scientific evidence to inform decision-making is imperative, and to reflect on changes as our knowledge in this space grows.
If you’re keen to learn more or have thoughts to share, I’d love to connect and have a chat! You can reach me at Tushaani.naidu@sac.co.uk
I also recommend this podcast episode by Economics for Rebels that explores this theme in greater detail.
Posted by Tushaani Naudi on 24/05/2024
