NATURE SHARES
Beyond carbon: Why we can't wait to act on nature recovery
As we approach Environmental Awareness Month in September, and the upcoming Biodiversity COP16 in Cali, it’s important to reflect on corporate investments into better environmental outcomes for society and nature.
Voluntary carbon credits: One piece of the puzzle
Addressing carbon emissions is undeniably crucial in the fight against climate change and great strides have been made in this area. The voluntary carbon market — fuelled by global attention to climate change and the straightforward, universally understood, metric of carbon (1 tonne of CO2e) — has expanded rapidly.
Despite ongoing concerns over the integrity of projects and reporting, the value of carbon credits continues to rise. BloombergNEF (2024) notes that restoring trust in carbon credits is essential to meeting growing demand.
Current prices for Woodland Carbon Code units range between £15 and £25. But similar carbon projects could increase to £188 by 2050, with price increases starting in 2030, if high-quality standards are met. This has the potential to create a market worth over £865 billion annually (Woodland Carbon Code, 2024; BloombergNEF, 2024), though these prices do and will vary by project type and whether units are ready or pending issuance.
As more companies adopt net-zero and nature-based targets, and regulations like the TNFD evolve, the market is expected to keep growing.
This growth has spurred investment in high-quality, verified, nature-based carbon sequestration projects such as reforestation and peatland restoration. However, while these projects provide notable climate benefits, they must be approached as holistic ecosystem solutions to effectively address biodiversity loss.
Carbon challenges
Large-scale, monoculture tree-planting projects — often called "Phantom Forests" — frequently fail, highlighting the need for more thoughtful reforestation strategies. Experts argue that natural regeneration often yields better, more sustainable results but carbon sequestration rates can vary (Yale Environment 360, 2022).
For example, natural woodland regeneration captures between 9.1 and 18.8 tonnes of CO2 per hectare annually, while planted forests can absorb up to 40.7 tonnes, though agroforestry typically sequesters less (One Tree Planted, 2024).
Although carbon markets have succeeded, they typically focus on habitats optimised for carbon sequestration, neglecting other ecosystems vital for biodiversity. The global carbon metric has sparked debate over whether carbon markets can effectively drive nature restoration, but these markets inevitably prioritise habitats with the highest carbon sequestration potential, limiting broader ecological benefits.
To address both climate change and biodiversity loss, we must invest in restoring a wide range of habitats. Diverse ecosystems — such as wetlands and grasslands — support more species and enhance carbon capture, leading to healthier, more resilient environments.
The role of BNG
At Environment Bank, we believe that addressing biodiversity loss is just as urgent as tackling carbon emissions. That’s why we’ve developed our Habitat Bank network, built upon the robust principles underlying the UK Biodiversity Net Gain (BNG) policy framework and Defra’s Statutory Biodiversity Metric.
Our BNG product, which aligns with UK legislation, provides developers with an efficient way to achieve their mandatory 10% BNG uplift on development projects. This ensures that new developments actively contribute to habitat creation and restoration, placing nature recovery at the core while also delivering additional ecosystem services, such as carbon sequestration.
In addition to this mandatory compliance market, we’re now also offering voluntary opportunities for companies aiming to further enhance their sustainability efforts through BNG. These voluntary projects go beyond regulatory BNG requirements, providing even greater benefits by allowing for more flexible, innovative approaches to ecosystem restoration.
When businesses choose to participate voluntarily, they can contribute towards significant, nature-positive impacts, particularly in supporting biodiversity, fostering resilient habitats, and indirectly sequestering carbon.
Biodiversity credits and beyond
Making BNG projects available to a voluntary market aligns closely with the biodiversity credit market which, although still emerging, is rapidly gaining traction.
The Biodiversity Credit Alliance (2024) defines a biodiversity credit as "a measured and evidence-based unit of positive biodiversity outcome that is durable and additional to what would have otherwise occurred."
Purchasing these credits offers businesses the opportunity to invest in high-quality biodiversity projects, not only supporting nature recovery but also potentially yielding premiums similar to those seen in the carbon market. Recent market trends, such as those highlighted by the BeZero Carbon report (2024), show a premium of up to 400% for higher-rated nature-based projects.
To truly address our environmental challenges, we need a balanced approach that considers both carbon sequestration and biodiversity conservation. This means:
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Developing robust standards and verification mechanisms for biodiversity credits, similar to those in the voluntary carbon market and BNG compliance market.
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Encouraging businesses to invest in biodiversity credits that not only support nature recovery and carbon reduction but also provide multiple benefits such as habitat creation, carbon storage, and supply chain resilience.
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Supporting research into the complex interactions between carbon cycles and biodiversity through monitoring habitat restoration on our project sites.
At Environment Bank, we're dedicated to advancing a comprehensive approach to environmental restoration. By investing in the right systems today, we can build a future where both our climate and ecosystems are resilient and thriving.
Find out more about our voluntary biodiversity projects