Plans to turn “nature-positive” outcomes into a new asset class are advancing rapidly. Governments, banks, and conservation NGOs are promoting biodiversity credits as innovative tools to bridge the global funding gap for biodiversity conservation. However, for Indigenous Peoples inhabiting some of the world’s most biodiverse regions, these emerging markets risk repeating – and even exacerbating – the impacts already observed with carbon offsets and biodiversity banking.
Biodiversity credits have been positioned as a key tool to implement the Kunming–Montreal Global Biodiversity Framework (KMGBF) under the Convention on Biological Diversity (CBD), particularly through Target 19 on resource mobilisation. Target 19calls for at least USD 200 billion per year by 2030 and explicitly encourages “innovative structures such as payment for ecosystem services, green bonds, biodiversity offsets and credits, and benefit-sharing mechanisms”.
One biodiversity credit represents a quantified, measurable and tradable “unit” of a positive biodiversity outcome ,such as the restoration or protection of particular ecosystems or species. Leading initiatives insist that, unlike traditional offsets, these credits should serve solely as additional investments in biodiversity rather than as mechanisms to compensate for damage caused elsewhere. In this context, they are presented as a voluntary tool for companies and investors seeking to demonstrate “nature-positive” contributions; however, the distinction between credits and offsets remains unclear in practice.
Various structures driven by States and private actors have explored “dual use,” whereby biodiversity units contribute to both mandatory regulatory offset requirements and voluntary “nature credit” markets. However, this possibility remains controversial due to concerns regarding double counting and system integrity concerns. National approaches vary: For example, England’s Environment Act 2021 established a mandatory, regulated market for biodiversity units, whereas New Zealand currently supports a voluntary, privately managed market that could eventually interact with regulatory offset mechanisms.
The Promotion of Private Financing
Major carbon certification bodies and consultancies are also entering into this space. Organisations such as Verra, South Pole, Plan Vivo, rePLANET, Terrasos and ValueNature have developed methodologies to certify biodiversity outcomes and create tradable units. The appeal is clear: a new product for investors and corporations, and a new revenue stream for intermediaries who already control a large share of the carbon market.
A growing network of initiatives – including the Biodiversity Credit Alliance, the World Economic Forum’s Financing for Nature platform, the Taskforce on Nature-related Financial Disclosures (TNFD), and new multilateral funding mechanisms such as the Global Biodiversity Framework Fund under the Global Environment Facility – is shaping the architecture of nature finance and promoting “high-integrity” biodiversity markets. In parallel, initiatives such as the International Advisory Panel on Biodiversity Credits are advancing a Global Biodiversity Credits Roadmap through voluntary, multi-stakeholder processes.
At COP16 of the Convention on Biological Diversity, governments prioritised mobilising private finance for the Kunming-Montreal Global Biodiversity Framework (KMGBF) and operationalising the Global Biodiversity Framework Fund, yet they stopped short of formally endorsing biodiversity credit markets. Although the fund recognises Indigenous Peoples’ rights and social safeguards, serious doubts remain regarding how compliance with these commitments will be upheld in practice as biodiversity financing increases.
The Roadmap towards Nature Credits does not adequately address the rights of Indigenous Peoples, including their rights to lands, territories, and resources.
The Roadmap towards Nature Credits does not adequately address the rights of Indigenous Peoples.
In July 2025, the European Commission published its Roadmap towards Nature Credits, a market-based framework aimed at mobilising private sector investment for biodiversity conservation, based on the premise that public funding alone is insufficient. The Roadmap does not adequately address the rights of Indigenous Peoples including their rights to lands, territories, and resources. Nor does it sufficiently address the structural drivers of biodiversity loss, such as biodiversity-harmful subsidies, financial flows and production systems.
Can biodiversity be standardised and sold?
Proponents of this argument note that biodiversity credits can unlock conservation funding, reward sound environmental management, and incentivize better business practices. However, the “financing gap” approach adopted in the MMBKM obscures the fact that current proposals rely heavily on private capital from the very entities most responsible for biodiversity loss. This reinforces patterns in which wealthy states and corporations retain control over “nature finance” flows.
Biodiversity credits thus risk replicating colonial dynamics by concentrating decision-making power and value extraction in the Global North, while positioning Global South territories and peoples as sites of environmental “reparation.” The technical language of “market integrity” ultimately upholds a political project that preserves extractive economic patterns while shifting responsibility for ecological damage onto the lands of Indigenous Peoples and racialised communities.
Current strategies disproportionately benefit market-based tools, avoiding the strengthening of territorial rights, the halting of destructive projects, or subsidy reform.
Current strategies disproportionately benefit market-based tools, avoiding the strengthening of territorial rights, the halting of destructive projects, or subsidy reform.
However, core challenges are often presented as technical problems: defining a biodiversity unit that is scientifically robust, measurable and scalable. In practice, these efforts face deeper ecological and ethical problems. Biodiversity is radically place-based — ecosystems are not interchangeable, and their relationships complex and often only partially understood. Attempts to define “ecological equivalence” have already failed in biodiversity offset systems/ Awith a global review found that most of these structures failed to deliver on their promise of “no net loss” due to poor monitoring, weak enforcement, and unrealistic restoration timelines.
Although biodiversity credits claim to focus on positive outcomes rather than compensating losses, they inherit the same logic of converting complex ecological relationships into standardised, tradable units. The push for global fungibility reflects investors’ need for liquidity rather than ecological realities. As a result, this carries the risk of fragmenting ecosystems into “assets” and “service units” — undermining the holistic approaches to territory that underpin many Indigenous legal orders.
There is also a broader issue regarding reliance on markets to resolve a crisis largely driven by accumulation of wealth. Economic tools, such as credits, should complement — not replace — regulation, public funding and collective forms of governance. Yet, current strategies disproportionately prioritize market-based instruments, while failing to strengthen land rights, halt destructive projects, or reform subsidies.
Indigenous territories at the frontline of biodiversity finance
Many biodiversity credit pilot projects are being developed in the Global South, particularly in forest territories governed by Indigenous Peoples —the same lands that have hosted carbon offset projects over the past two decades, frequently accompanied by rights violations and social conflicts. Protected areas have repeatedly been established without recognising customary tenure, without ensuring Free, Prior, and Informed Consent (FPIC), and with severe restrictions on traditional livelihoods. Biodiversity credits are likely to intensify these dynamics in various ways:
Land pressure. Assigning a financial value to biodiversity conservation outcomes makes Indigenous territories more attractive to conservation investors, particularly where land rights remain unresolved, creating a risk of long-term management arrangements that marginalize customary institutions.
Control and surveillance. Verification systems such as remote sensing, standardised indicators, digital tokens displace Indigenous knowledge and governance, benefitting external experts whilst potentially monitoring how communities use their own territories.
Unfair contracts. As with carbon projects, communities often lack independent legal advice; contracts may be signed by narrow leadership without collective consent, with small and poorly documented revenue shares vulnerable to elite capture.
Division and criminalisation. Where significant sums of money are at stake, intermediaries can exploit internal differences to secure consent. Those who question projects risk being labelled anti-development or threats to conservation — a serious concern given the growing criminalisation and killing of environmental defenders.
Beneath these concrete risks lies a deeper clash of values. Biodiversity credit methodologies reduce nature to what can be counted, economically valued and traded, whereas many Indigenous knowledge systems are grounded in responsibility, reciprocity and the sacred nature of the natural world — where territory cannot be partitioned into commodities. When that relational worldview is treated as an obstacle rather than a foundation for public policy, biodiversity credits become yet another tool of colonisation.
Whose integrity?
In response to mounting criticism, biodiversity credit initiatives emphasize “high-integrity” principles such as robust governance, FPIC, equitable benefit-sharing, and grievance mechanisms. Some multilateral funds publicly recognise Indigenous Peoples as custodians of biodiversity. However, there is a marked gap between rhetoric and practice. Core principles and methodologies are being designed by coalitions of financial institutions, conservation NGOs and standard-setting bodies, with limited or late-stage Indigenous involvement.
Since the adoption of the KMGBF, numerous Indigenous organisations — including the UN Permanent Forum on Indigenous Issues — have repeatedly warned, including at CBD COP16, that biodiversity markets risk replicating the dispossession, inequality, and territorial control observed in carbon offset projects. These organizations emphasise that biodiversity financing must address historical injustices, strengthen direct funding for Indigenous Peoples, and avoid commodifying nature while undermining collective territorial governance. Any emerging biodiversity credit framework must critically incorporate these positions.
Governance must reflect genuine Indigenous leadership. Indigenous organizations must occupy real decision-making spaces in the design and oversight of biodiversity financing mechanisms.
Governance must reflect genuine Indigenous leadership. Indigenous organizations must occupy real decision-making spaces in the design and oversight of biodiversity financing mechanisms.
Three fundamental shifts are required to prevent biodiversity credits from replicating the harms associated with carbon markets. First, rights must precede markets: recognition of Indigenous Peoples’ land, territory and collective tenure rights should be a prerequisite for any credit scheme, rather than an aspiration. This entails the full implementation of the UN Declaration on the Rights of Indigenous Peoples — particularly regarding FPIC and self-determination — in both law and practice.
Second, governance must reflect genuine Indigenous leadership. Indigenous organisations should hold real decision-making roles — not merely advisory ones — in the design and oversight of biodiversity finance mechanisms, supported by dedicated funding and respect for diverse knowledge systems. Third, the role of credits must remain limited. They should neither license destructive activities through offsetting nor replace regulation and public financing. Binding rules are needed to prevent double-counting, greenwashing and the use of credits to justify mining, fossil fuel extraction or large infrastructure projects elsewhere.
Choosing a different path
The drive for biodiversity credits addresses a real problem: chronic underfunding of biodiversity, particularly where Indigenous Peoples are its primary custodians despite historic marginalisation. Yet, direct funding for Indigenous-led conservation, coupled with legal reforms to secure land and governance rights, would likely deliver far more enduring outcomes than speculative credit schemes.
Whether or not Indigenous Peoples engage with these markets is a matter of self-determination, but any decision must be based on FPIC with transparent information regarding the risks and alternatives. Governments and private actors must not treat credit schemes as a shortcut around the harder decisions of ending destructive industries and confronting unequal power relations.
The fundamental question is which visions of nature, development and justice will shape the future. If biodiversity credits simply reinforce the extractive logic that created the biodiversity crisis, they will represent another round of sacrifices imposed on Indigenous Peoples.
Rosario Carmona holds a PhD in Anthropology and works as programme consultant on climate with the International Work Group for Indigenous Affairs (IWGIA).
Silje Heldt Zaltzman works as an Advisor on Biodiversity with the International Work Group for Indigenous Affairs (IWGIA).
Fer Rojas holds a PhD in Geography and works as an Assistant Professor at the Institute of Geography at Pontificia Universidad Católica de Valparaíso.