Offsets are not the only basis for net gain

Halting biodiversity loss related to site-based impacts is a priority. However, on its own it is not enough to turn things around and reverse the global downward trajectory of nature so that we can collectively and consistently contribute to the wider societal nature positive goal. Net Positive Impact (NPI, or net gain) for biodiversity is now the minimum ambition necessary to align with international leading practices. Bluedot has developed a Nature Position Tool designed to help organisations define their project- and corporate-level position with respect to delivering NPI, from proportionate site-based actions that balance losses and gains, to broader transformative ecosystem-based actions that go beyond that. Biodiversity offsets might sometimes be necessary for projects to achieve NPI, but only under specific circumstances, and they are frequently confounded by inherent challenges of feasibility, pragmatism, and effectiveness – particularly in the marine realm. Here, we outline how to reframe site-based approaches to NPI, to deliver offsets only when appropriate and necessary, and to use measurable on-the-ground Additional Conservation Actions (ACAs) that enable better opportunities for projects to deliver NPI in more flexible and transformative ways.

Distinguishing offsets from other actions to support positive outcomes for biodiversity

The traditional mitigation hierarchy is a well-established, tried and tested framework for the way we mitigate site-based impacts, through a prioritised and iterative sequence of preventative measures (avoidance and minimisation) and remediation actions (restoration and offsetting). Following the mitigation hierarchy implies a target of No Net Loss (NNL) or NPI (where offset actions lead to gains that outweigh project losses).

While the mitigation hierarchy definitions are oft stated, the prevailing offsets definition bears repeating as this sets the conditions and context for their application. Globally, for well over a decade, leading guidance has clearly defined offsets as ‘measurable conservation outcomes of actions designed to compensate for significant residual adverse biodiversity impacts arising from project development after all appropriate prevention, minimisation and restoration measures have been applied’¹. It should be noted that such guidance makes a distinction between offsets and compensation. This essentially relates to the need for offsets to address residual impacts to achieve a NNL or NPI outcome, which is not always the outcome of compensation approaches². The longstanding emphasis of offsets is not on all impacts, but rather on impacts that are significant for an ecological receptor and the processes that support it. This is so that offsets are set against ecologically meaningful and measurable loss to ensure that NNL, and preferably NPI, is achieved. The application of the mitigation hierarchy seeks to reduce adverse residual impacts at each step, in turn reducing the likelihood that they will be significant. Hence, offsets are a measure of last resort not intended to be applied to all losses. They are defined by the quantity of residual loss, tied to the specific impacted feature, and should be guided by strict offset principles including equivalence (like-for-like) and multipliers to determine the amount of gain necessary.

What constitutes a significant impact does not have a standard quantitative definition because the characteristics of biodiversity impacts (e.g., magnitude, duration, likelihood, and severity) are context-specific and therefore widely variable. It is generally implicit that significant impacts must be those that cause detectable, measurable change. But more than this, understanding significance means understanding the net effect of the impact – the overall outcome at an ecologically appropriate scale. The Global Reporting Initiative definition is a strong basis: significant impacts are those that ‘adversely affect the integrity of a geographic area or region…by substantially changing its ecological features, structures, and functions across its whole area, and over the long term, so that habitat, its population levels, and the particular species that make the habitat important cannot be sustained³. Such effects do not result from just any amount of loss. In addition, longstanding best practice biodiversity safeguard standards have set out requirements for ensuring that significant measurable loss does not occur for critical habitat⁴. In this context, measurable impacts are framed as those leading to significant effects on ecosystem integrity that jeopardises persistence of features being impacted⁵.

Ecosystem, or ecological, integrity is a broad concept describing the completeness, functionality, or health of an ecosystem⁶. Ecosystems do not exist in a static state and ecosystem integrity relates to natural range of variation. Ecosystem integrity is the ability of an ecological system to support and maintain its composition, structure and function comparable to natural habitats⁷. Natural habitats are also not interpreted as pristine systems, but rather areas that contain the principal characteristics and functions of native ecosystems⁸, which acknowledges that the absence of any human-induced modification is rare. An ecological system has integrity, or a species population is viable, when its dominant ecological characteristics occur within their natural ranges of variation and can withstand and recover from most perturbations imposed by natural environmental dynamics or human disruptions⁹. Hence, some losses can be tolerated and will be reversible or recoverable.

Framed this way, NNL does not mean zero impacts, or the complete absence of impact. Rather, it means that following avoidance, minimisation, and restoration mitigation, the ecosystem remains intact, functions continue, and features persist – i.e., there is NNL of ecosystem integrity. Framing NNL in relation to change in ecosystem integrity is an important concept as it not only relates to the specific features that are affected but embeds the need to consider the broader ecological processes that support those features. Again, this need is a longstanding requirement held within best practice biodiversity safeguard standards to frame a more complete understanding of risk. This means that establishing the significance of an impact to determine what loss occurs should be done in terms of how integrity is affected for features impacted. This requires the application of appropriate pressure indicators to confirm when significant impacts occur.

Based on this logic, offsets are not a proportionate or pragmatic response to delivering NPI where NNL of ecosystem integrity has already been achieved. Indeed, their application would not be ecologically meaningful and may not be measurable in the context of negative or positive changes to ecosystem integrity. Applying offsets without framing loss appropriately creates an obvious issue for defining what loss has occurred, how to measure such loss, define an appropriate action that balances it, and measure the net gain that balances the loss. These issues lead to complications associated with defining meaningful metrics and being able to practically apply measures in the real world. At worst, it may result in actions that do not lead to long term meaningful improvement to ecosystem integrity. These issues abound in offset application globally.

Therefore, where offsets are not appropriate, an alternative approach to delivering biodiversity gains is required where NPI is the desired goal. This approach should support pragmatic actions that drive a clear integrity gain for individual and multiple features, with proper consideration of ecological processes. Where NNL of ecosystem integrity has been achieved without offsets, an NPI outcome can be achieved using actions that lead to measurable positive outcomes on the ground. Again, this concept is founded in longstanding best practice biodiversity assessment guidance¹⁰. Such actions are additional to the mitigation hierarchy and can be applied when NNL of ecosystem integrity is demonstrated following any combination of site-level avoidance, minimisation, and restoration measures.

At Bluedot, we frame such actions using the term ‘ACA’, defined as measurable on-the-ground actions designed to have positive outcomes for biodiversity, relative to the baseline. They are intended to achieve quantitative gains (improvements) in ecosystem integrity, but they are not defined by a quantity of loss and are thus not tied to a specific impacted feature – like-for-like is not essential. This differs from the historic definition of ACAs, which applied to measures not intended to deliver a measurable positive outcome on the ground but are instead framed as qualitative actions to support other mitigation¹¹, especially offsets.

As such, qualitative ACAs are generally not suitable as the central net gain approach. However, acknowledging that offsets are not always applicable to achieve NPI, and that they may not be the most effective and impactful mechanism to deliver NPI when NNL of ecosystem integrity has been achieved, we reframe the definition of ACA to apply to all measurable on-the-ground actions that lie outside of the mitigation hierarchy and can drive an NPI outcome (see the figure below). ACA approaches may also incorporate supportive qualitative measures to help achieve the on-the-ground outcome.

In this context, ACAs are intended to address features important in a project’s ecological context, at an appropriate scale for delivering meaningful and measurable positive improvement to biodiversity. As ACAs do not need to apply like-for-like approaches there is potential for actions with a high capacity to exert influence and realise meaningful gains. ACAs may thus also be defined in way that seeks to maximise contributions to wider transformative change and nature positive outcomes in a given study area, in line with global goals for biodiversity. It is important to note that offsets might still apply in specific circumstances (and indeed, there may still be situations where adverse residual impacts are of such significance that offsetting is not possible). In the same way, it is important that if ACAs are used, they deliver gains that are meaningful in terms of ecosystem integrity, to avoid actions that do not drive measurable on-the-ground change.

Driving positive and transformational change through measurable on-the-ground ACAs

With all this in mind, ACAs can offer broader and more flexible opportunities to deliver gains than offsets – acknowledging that they should only be applied where offsets are not necessary. Longstanding guidance has set out principles to guide the design and implementation of offsets¹². Whilst the implementation of ACAs can be guided by some of these principles, they are not bound by them, mainly as they are not intended to be set against significant residual impacts in the way that offsets need to be. Offsets involve accounting against significant loss, with NPI limits applied that are proportionate to this loss. ACAs are not defined in terms of significant loss of ecosystem integrity, meaning there is potential for actions to drive greater positive gains than offsets. Thus, ACAs can be defined in way that can lead to clear and measurable net positive outcomes in situ for single or multiple features, especially if they are focused on restoration approaches that reverse biodiversity loss. The scope and target for NPI through ACAs can be guided by the available conservation opportunities at the appropriate ecological scale. Theoretically ACAs are then only limited by the ambition of the actor seeking to deliver the NPI outcome. In offshore environments especially, where there is appropriate understanding of ecosystem pressures and associated loss of integrity, ACAs provide practical solutions to deliver NPI and may be the best and most appropriate means of delivering NPI (especially when compared to the complexity of delivering offsets that actually achieve NNL and NPI in the three-dimensional and highly interconnected marine realm).

In summary, this guidance seeks to:

• Make clear that NPI is not only driven by offsets for significant residual loss of ecosystem integrity.
• Clarify the importance of ensuring that meaningful losses are properly determined in terms of ecological integrity.
• Emphasise the need to mitigate losses as far as possible without offsets, to be able to understand whether significant residual loss of integrity remains and the requirement for offsets exists.
• Reframe ACAs as on-the-ground actions that can deliver measurable biodiversity gains, which can be applied where offsets are not needed and can offer greater and more flexible opportunities to deliver ecologically meaningful gains.

Bluedot has also developed a marine net gain framework to support NPI for marine site-based impacts, helping projects to understand the ecologically appropriate scale at which NPI should be considered to have optimum impact, which biodiversity features are a priority for NPI, how to frame significance in terms of change in ecosystem integrity, and where in the study area are the best opportunities for delivering positive outcomes for both biodiversity and people.

Through appropriate framing, robust application of the mitigation hierarchy and consideration of potential for ecosystem integrity change, the outcome should be that offsets are the exception and ACAs the rule. Shifting approaches that take account of this could constitute significant progress in determining what contributions can be made to halt and reverse biodiversity loss in a way that creates better outcomes and improves the alignment of actions with global conservation goals.

• Offsets are intended to address significant adverse residual impacts that remain after all appropriate avoidance, minimisation, and restoration measures have been applied. The emphasis is on significant impacts, not all impacts.
• Significant adverse impacts cause detectable, measurable, changes in ecosystem integrity that jeopardise the persistence of the features being impacted. Ecosystem integrity is the ability of an ecological system to support and maintain its composition, structure and function comparable to natural habitat. Hence, some losses can be tolerated and will be reversible or recoverable.
• Framed this way, no net loss (NNL) does not mean zero impacts – it means there is NNL of ecosystem integrity. The ecosystem remains intact, functions continue, and features persist. Offsets are not a proportionate or pragmatic response to delivering NPI where NNL to ecosystem integrity has already been achieved. Indeed, as offsets are meant to address significant residual impacts, they are not relevant in this context.
• Where NNL of ecosystem integrity has been achieved without offsets, NPI outcomes can be achieved through measurable on-the-ground actions that lead to positive outcomes for biodiversity, relative to baseline. We frame these measures as Additional Conservation Actions (ACAs) they are additional to the mitigation hierarchy, quantitative but not defined by a quantity of loss, and thus not tied to a specific impacted feature or some offset principles. This – is different to the historic definition that limits ACAs to qualitative supportive actions. Qualitative measures may still be relevant to support the measurable on-the-ground actions, but they are not central to driving a net gain outcome.
• ACAs provide opportunity for flexible approaches to reverse biodiversity loss at the ecosystem level, including transformative outcomes, which can contribute achieving global conservation goals. Offsets may still apply in specific circumstances, but with approaches that seek to ensure NNL of ecosystem integrity before offsetting, they should be the exception and ACAs the rule.

¹ https://www.forest-trends.org/bbop/bbop-key-concepts/biodiversity-offsets/ and used by IFIs in standards including International Finance Corporation Performance Standard 6 (IFC PS6) (2012) and The European Bank for Reconstruction and Development Performance Requirement 6 (EBRD PR6).
² Business and Biodiversity Offsets Programme (BBOP) – Biodiversity Offsets Standard (2012).
³ GRI Standards Glossary
⁴ Defined as areas with high biodiversity value, based on a series of quantitative and qualitative criteria set out in biodiversity safeguard standards such as IFC PS6 (2012).
⁵ International Finance Institution biodiversity safeguard standards (such as IFC PS6, 2012) seek to ensure through application of the mitigation hierarchy that projects they fund do not lead to measurable adverse impacts on those biodiversity values for which the critical habitat was designated, and on the ecological processes supporting those biodiversity values. This may be achieved with or without offsets. ERBD PR6 (2019) defines measurable adverse impacts as comprising those that will jeopardise the viability/ persistence of any biodiversity value that triggers a critical habitat designation.
⁶ CBD
⁷ Parrish, J. D., D. P. Braun, et al. (2003). “Are we conserving what we say we are? Measuring Ecological Integrity within Protected Areas.” BioScience 53(9): 851-860.
⁸ IFC Guidance Note 6 (IFC GN6) (2019).
⁹ Parrish, J. D., D. P. Braun, et al. (2003). “Are we conserving what we say we are? Measuring Ecological Integrity within Protected Areas.” BioScience 53(9): 851-860.
¹⁰ IFC Guidance Note 6 (IFC GN6) (2019).
¹¹ CSBI (2015). A cross-sector guide for implementing the Mitigation Hierarchy.
¹² BBOP Principles on Biodiversity Offsets (2012).