Nature in the boardroom: Monetisation models driving corporate strategy | opinions

For corporations, one of the biggest challenges in investing in nature-based solutions is demonstrating a strong financial business case for environmental impacts – after all, you can’t send nature an invoice to recoup your investment. Nature credits offer a solution by enabling corporate leaders to monetise the positive outcomes their actions have on the environment. Nature credits are tradable certificates that represent measurable, verified improvements to natural ecosystems – such as enhanced biodiversity, restored habitats, or increased carbon sequestration – which companies can sell and earn money from. For example, in the United States and Australia, water credit programmes allow organisations to monetise improvements in water quality. The United Kingdom’s Biodiversity Net Gain Policy has introduced biodiversity credits, while the European Union’s Carbon Removals and Carbon Farming Certification (CRCF) will soon allow companies to earn nature credits for practices such as peatland restoration, agroforestry, and soil carbon sequestration.

We recognise that global voluntary carbon and nature markets are far from perfect. These markets face significant challenges, most notably, issues of additionality and leakage which can undermine the integrity and quality of credits. Additionality means that the positive environmental impact created by a project, such as carbon reduction or habitat restoration, would not have happened without the specific intervention funded by the credit. If a project would have occurred anyway, its credits do not represent a true net gain for the environment. Leakage occurs when efforts to protect or restore nature in one location inadvertently lead to harmful effects elsewhere. For instance, safeguarding a forest in one region can result in increased deforestation in another if the underlying drivers, such as demand for wood, soybeans, or coffee, are not addressed.

Nevertheless, despite these obstacles, engaging in these markets enables business leaders to generate financial value while establishing a clear and measurable connection to their carbon and nature-related performance, thereby enhancing both accountability and transparency. While the Tropical Forest Forever Facility offers investors a promising way to support nature conservation, nature credits present a more practical and direct solution for corporate leaders seeking to integrate environmental impact into their business strategies.