Written by Jim Tolisano, Business and Conservation Initiative, Wildlife Conservation Society

1. Achieving Net Positive Impacts
for Biodiversity
Through the Mitigation Hierarchy

2. What is the Challenge to Biodiversity?
• New investments in infrastructure and resource development
are growing rapidly.
• Company commitment to biodiversity conservation is growing.
• Financial institutions seeking more environmental
responsibility
BUT …
• Most funding is project based and does not look at impacts
beyond the project boundary.
• Impacts from multiple developments are typically cumulative.
• Existing environmental compliance process does not achieve no
net loss of biodiversity (NNL) or net positive gain (NPG)

3. Implementing the Mitigation Hierarchy
Offset to Achieve Net Positive
Impact
Offset to Achieve No Net Loss
Restoration
Minimization
Avoidance
• Create a system for
planning and that limits
impacts to biodiversity and
ecosystem services and
incorporates that into the
EIA process
• Create a value for
biodiversity and
ecosystems services and
system where the
developer pays.

4. Definition
What are Biodiversity Offsets?
Measurable conservation outcomes to compensate
for significant impacts to biodiversity that remain
after appropriate prevention and mitigation measures
have been taken.
The goal of biodiversity offsets is to achieve no net
loss, and preferably a net gain, of biodiversity on the
ground with respect to species composition, habitat
structure, ecosystem function and people’s use and
cultural values associated with biodiversity.

5. Some Key Offset Concepts
Ecological Equivalence or
Like for Like
=
≠

6. Some Key Offset Concepts
Limits to What Can be Offset
Feasibility best below
curve (lower risk)
High
Low to moderate
irreplacability
Irreplaceability
Vulnerability moderate to
high - conservation
options should exist
Low
Low
Vulnerability
High
Vulnerability low but
biodiversity is restorable
adding value

7. A Key Role forProject Metrics
Thresholds – offsets
• Biodiversity counts and measures
(what - is being exchanged, or lost and gained)
• A currency constructed from these data
(how much of what is being exchanged)
• An accounting model defining offset specifications
(how much of what is needed)
• Spatial information to identify potential offset locations
(where)

8. Some Key Offset Concepts
Permanence –
Offsets should be designed and
implemented to guarantee the
outcomes over the long-term
Legal, financial and management
mechanisms need to be in place to
secure outcomes that last at
least as long as the development
project’s impacts and preferably
in perpetuity.

9. Types of offsets
1) Individual offset
Source: Ambatovy Project
2) Aggregated offset
Source: World Bank, 2009
1) Conservation
bank
Source: Carroll, Ecosystem Marketplace

10. Implementation options
Option 1:
Single (individual) site
• Address the residual
impacts of a single project
• Demonstrate additional,
measurable conservation
outcomes
Option 2:
Aggregated site
Option 3:
Conservation banking
• One offset/compensation is
planned to address several
projects’ impacts
• Offset/compensation demand
is known in advance
• Designed to compensate for
specific biodiversity impacts
• Biodiversity credits are
established in advance of
any losses they may be used
to offset/compensate
• Designed to supply
offsets/compensation over
time for multiple losses

11. Three ways to implement offsets or
compensatory conservation:
• Developer and/or partners
(NGO, consultant, multi-stakeholder group)
undertake the offset
• Developer buys sufficient ‘credits’ from a
landowner or conservation bank to offset its
impacts.
• Payment to a government authority ‘in lieu’
(least desirable – other options preferred)

12. What Can We Learn from BBOP to
Respond to this Challenge?
A collaboration of >75 companies, financial institutions, government agencies and
civil society organizations working collaboratively, to develop best practice in
biodiversity offset design and implementation based on agreed principles.

13. Principles for biodiversity offsets
Principles for biodiversity offsets
agreed by all the BBOP members
1.
Adherence to the mitigation hierarchy
2.
Limits to what can be offset
3.
Landscape context
4.
No net loss
5.
Additional conservation outcomes
6.
Stakeholder participation
7.
Equity
8.
Long-term outcomes
9.
Transparency
10. Science and traditional knowledge

14. Can’t EIA take care of
Offsets compared with Environmental
Impact Assessment (EIA)
biodiversity?
• EIA rarely considers ‘no net loss’.
• EIA typically only requires avoidance/minimization for some
impacts.
• Usually does not address residual impacts.
• Does not address all components of biodiversity.
• Often very site specific – requires a landscape scale.
• Often fails to address indirect and cumulative impacts.
• HOWEVER the Mitigation Hierarchy can be integrated into
the EIA process to deliver NNL and NPG!

15. Going Beyond Compliance
Integrating the mitigation
hierarchy within the EIA process
allows projects to:
•
•
•
Apply a landscape perspective
Respond to cumulative impacts
Produce comprehensive and
permanent solutions that can
Avoid
Minimize
Mitigate
Offset-Compensate
Impacts to biodiversity and
ecosystem services

16. Working with a Broad Array
of Stakeholders
Business –
Making the
Business Case
Government- NNL
Policy Development
Civil Society Consultation and
Participation
Financial Institutions
– Lending Practices
PS6, Green
Protocols, Equator
Banks

17. The Business Case: Managing Risk
Conservation planning can mitigate Risk
• Regulatory risks
– Profitability may be threatened by fines, claims for damage, delays or
loss of authorization
• Reputational risks
– Loss of trust, poor profile, target of negative publicity, NGO campaigns,
loss of license to operate
• Financing risks
– Tougher access to investment capital—debt and equity—especially
given growing offset requirements by Equator banks
• Operational risks
– Poor consideration of biodiversity & ecosystem services can increase
future vulnerability to risks (e.g. inadequate water supply, flooding)

18. The Business Case:
Gaining Competitive Advantage
• Access to land – at initial stages of project
development & for ongoing exploration to extend the
lifetime of existing projects;
• Legal and social license to operate
• Access to old & new markets
• Access to human capital
• A seat at the policy development table

19. What do Governments Need?
• Provincial and federal standards and policies
that support the Business Case
• Standards and policies that fulfill
international agreements
• IUCN Red list, CITES, etc.
• Complementarity with growing lender
standards and policies
– IFC Performance Standards 1 and 6

20. Financial Institutions Step up to the Challenge IFC PS6 and the Equator Principles Association
Canada Banks Adhering to Equator Principles
• Bank of Montreal
• Bank of Nova Scotia
• Canadian Imperial Bank of Commerce
• Export Development Canada
• Manulife Financial
• Royal Bank of Canada
• TD Financial Group

21. What Do Equator Principles Require
from Borrowers?
• To protect and conserve biodiversity.
• To maintain the benefits from ecosystem
services.
• To promote the sustainable management
of living natural resources through the
adoption of practices that integrate
conservation needs and development
priorities.

22. Applying a Multi-Tiered Approach
Projects and policies that affect the decisions and behavior of key
stakeholders:
Governments
Mandates,
standards and
regulations on best
practices
(mitigation,
compensation)
affect company
behavior and
investment
approaches
Financial
Sector
Safeguards that
affect
performance
through pre
and postproject
requirements
Most Effective & comprehensive
Companies Industry
CSR and market
access affect
their actions on
the ground
(voluntary)

23. Mitigation Hierarchy Lessons Learned
Benefits for government and society
• Clear, streamlined guidance is needed for all stakeholders
to create certainty & to avoid delays
• Adequate performance monitoring and enforcement
• Incorporate the mitigation hierarchy into EIA and SEA
• Avoid methods that don’t deliver NNL (e.g. poor metrics)
• Avoid use of “in lieu” payments
• Develop effective financial mechanisms that provide longterm funding
• Involve the private sector as partners in the development
of best practice
• Landscape level approach is key to meeting conservation
objectives - Government role is key in this regard

24. Challenges to progress with NNL/NPG
Definition
• Political will
• Corporate commitment
• Institutional commitment
within banks
• Greater participation from the
NGO and scientific communities
• And overall: greater capacity +
more models to show results

25. Summary and Conclusions
• Business case is growing for companies
that often extends beyond legal compliance
• Lending community requirements
increasingly include higher standards than
required by governments
• Governments have an important opportunity
to contribute directly to biodiversity
conservation by creating an even playing
field for all businesses through clear
regulations on mitigation and offsets.
Need to move beyond current compliance
In order to adequately protect biodiveristy