A biodiversity credit is a certificate that represents a measured and evidence-based unit of positive biodiversity outcomes that is durable and additional, and can be traded. The use of biodiversity credits as financial instruments is in its infancy, and this paper is intended to serve as a preliminary foundational summary of potential demand for biodiversity credits.

Potential sources of demand reviewed:

• Voluntary footprint compensation driven by shareholder and stakeholder pressure 
• Businesses seeking credit market experience in anticipation of regulatory requirements
• Businesses seeking to comply with supra-national or national regulatory requirements 
• Businesses seeking to mitigate systemic business risk emanating from nature dependencies 
• Financial institutions and markets seeking nature positive investments
• Government agencies implementing policies, regulatory measures, or ODA
• Retail and individual consumer-facing companies and brands providing value for consumers
• Philanthropists, including foundations

The paper also outlines buyer motivations and factors potentially affecting biodiversity credit demand, such as quality and integrity, amongst others.

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The Biodiversity Credit Alliance Issue Papers are developed to provide background, analysis and research on key topics relevant to the formulation of a market in biodiversity credits. BCA Issue Papers are led by a member of the BCA Task Force and co-created by a dedicated Working Group. The BCA Working Group that developed this issue paper was co-led by the Environmental Policy Innovation Center and the Biodiversity Credit Alliance Secretariat. Landscape Finance Lab Founder and Lead Paul Chatterton formed part of the Working Group and contributed to the paper.