COP 17 in Yerevan and the business case for investing in nature

For decades, nature conservation and restoration have remained largely funded by public budgets and philanthropy, even if nature is an infrastructure that benefits people and businesses. Healthy ecosystems and secure water supplies stabilize supply chains, reduce climate risk and support the livelihoods of millions.

In October, Armenia hosted COP17 on biodiversity, the seventeenth meeting of the Conference of the Parties, bringing together countries that are parties to the 1992 United Nations Convention on Biological Diversity and the 2022 Montréal Kunming framework. One of the conclusions of the discussions is that investing in nature can deliver multiple returns for business and nature, if well framed. Yet private investment in terrestrial and marine environment remains well short of what is needed, while countries came to COP17 with nature targets they cannot meet with public money alone. In this context, the development of nature credits could be a useful tool.

What is a nature credit?

A nature credit is “a certificate that represents a measured and evidence-based unit of positive biodiversity outcome that is durable and additional to what would have otherwise occurred” ( International Advisory Panel on Biodiversity Credits - IAPB ). Companies buy nature credits to finance conservation or restoration and claim the verified benefits. These benefits can support voluntary corporate sustainability commitments, correspond to regulations imposing compensation or protect the ecosystems their supply chains depend on.

In 2024, at COP16 in Cali, IAPB, Biodiversity Credit Alliance and the World Economic Forum adopted joint high-level principles that will help people share the same vision worldwide. In Yerevan, a broad consensus emerged that nature credits should deliver real, verifiable benefits for biodiversity, ensure that benefits are shared fairly and equitably among the people and communities involved, and be traded in transparent markets with clear rules and effective oversight.

The good news is that governments are clearly entering the field as they are reviewing progress towards Target 19 of the Global Biodiversity Framework (Montreal/ Kunming 2022), which aims to mobilize US$200 billion a year for nature by 2030. They more and more identify nature credits as one way to attract private finance.

Forty-eight countries now refer to nature credits in their national biodiversity plans. Beyond France and the UK, that established IAPB in 2023, twenty-six are involved in IAPB’s policy forum, including megadiverse ones like Indonesia, Mexico or Canada, and early adopters of the Taskforce on Nature-related Financial Disclosures such as Japan. China is working on nature credit schemes. The EU Commission gathered in Yerevan “the friends of nature credit”, a group of EU and non-EU countries working together to develop these new instruments and exchange good practices. It shows a new awareness. The moment to scale is now.

A ROI analysis shows that investing in nature can pay back many times. In Yerevan a free online platform, built on an open-source methodology developed with The Landbanking Group was launched by IAPB, that will let companies quantify the business returns from investing in nature credits. ( For the ROI platform and open-source methodology, click here ).

In one example, a chocolate maker buys around US$360 million of nature credits to help

shift 78,000 hectares of cocoa farms in Côte d’Ivoire from full-sun monoculture to shade-grown cocoa. The shift lowers the premium paid for cocoa and increases sales, adding an estimated US$2.5 billion to the company’s value: nearly seven times its investment. In another, a data centre near Santiago, Chile, buys around US$2 million of nature credits to clear invasive trees from its water catchment, saving an estimated US$18 million in cooling costs by 2060. In both examples, payments also reward the people doing the work on the ground. The examples are illustrative and use modelled companies, with assumptions tested in interviews with businesses.

From principles to practice

IAPB published three draft standards that cover additionality (how can we make sure that the investment provides a gain that would have not occurred otherwise?), inclusion (how can we make sure that revenues go to the local stewards of nature, in an equitable way while respecting their rights?) and risk across a credit’s lifecycle (how should markets be organized). They set common minimum requirements on which governments can build national markets, without prescribing a single model, as nature is very diverse as political systems are.

These drafts are the fruit of intensive consultation. More than 1,200 comments, largely from governments, shaped the drafts. The Inclusion and Equity Standard drew the most feedback. Its safeguards require written agreements developed with communities on how they will be paid for the credits they generate; prohibit trading, financing, or retiring credits while a material harm complaint remains unresolved, and require trading to be suspended where severe harm is alleged; and ban forced evictions. Many discussions took place in Yerevan with representatives of local stewards of nature from diverse areas, including small islands.

On the delicate question of how to combine carbon and nature credits, most respondents supported ‘stacking’ instruments, where nature and carbon credits come from the same land, and the standards include a use case showing how this can work.

The drafts are open for public consultation until 14 December 2026 and the iteration will continue in the future.

In cooperation with Axa Climate and after consultation of many insurers, reinsurers and other private actors, IAPB has also published a discussion paper on which market risks insurers could cover , a key move towards making nature credits investable at scale.

The way still to go 
 

Progress since 2024 has been impressive, but of course, there is still a long way to go. Trust is the precondition for scale. At this stage, the constraint is not supply but demand from the private sector. The good news is that regulated markets are growing fast: England’s Biodiversity Net Gain policy, mandatory for most developments since 2024, is forecast to create a £3 billion market. France has taken a hybrid route with France Crédits Biodiversité , under which state-approved restoration sites generate credits that can be used either to meet legal offsetting obligations or bought voluntarily by companies and local authorities.

The development of credits at scale will require a joint effort by governments (to put the right framework and supervisory instruments in place), companies (to invest more) but also scientists (to better evaluate the ecological additionality), indigenous people and local communities (to provide solid projects) and consumers / citizens to adopt behaviors showing that they understand the most fundamental point: we are all embedded in nature and responsible for its future.