25 November 2025

In 2025 Fleur Maseyk, our biodiversity offsetting expert, headed off to the UK to learn more about their Biodiversity Net Gain legislation, credit markets, and a whole lot else besides. This article, on voluntary nature markets, is the first in a series where Fleur shares insights and reflections from this incredible opportunity. 

For me, effects management and the practice of biodiversity offsetting is somewhat of a conundrum – being both a subject area I hold expertise in (you can view some of that work here, here, and here) and an area of which I am cynical and questioning. That is to say, my intellectual curiosity runs in all directions. And now we are seeing – both here and overseas – an increased emphasis on biodiversity and nature markets either as part of, alongside, or explicitly independent of biodiversity offsetting policies.

So when I got the opportunity to head off to the UK for a month in September 2025, I jumped at the chance to talk with experts and practitioners to learn more about their Biodiversity Net Gain (BNG) legislation, habitat banks, and BNG suppliers, and the concept of nature credit markets (and a whole lot else besides). By the end of the month I had spoken with >35 experts – academics, ecologists, planners, landscape architects, arborists, BNG suppliers, nature positive and sustainability, landscape recovery and nature credit market experts – from > 20 organisations (universities, councils, consultancies, NGOs, private companies, and corporate entities). A month of interviews like this serves up a feast of information, and no shortage of highly relevant lessons and considerations as we here in Aotearoa set off on our own pursuit of doing better for nature.

In this first article in the series, I focus on reflecting on what I heard in the context of voluntary nature credit markets. This seems a good place to start given the government’s recent announcement in support of voluntary nature credit markets, and the privately funded pilot projects currently underway to test the waters in our local context.

First though, let’s take a quick refresher to provide some context.

⟩⟩ What are biodiversity and nature credit markets?  

Biodiversity and nature credit markets formalise and provide the infrastructure for the trade of ‘credits’ (also referred to as units). Biodiversity credits are defined as measurable positive outcomes for biodiversity (specifically) that are sold to buyers who have a need, or desire, to improve biodiversity. (you can find more details here and here). Nature credits are similar, but are used to fund positive environmental outcomes more generally and are not specific to biodiversity (e.g., carbon, water quality).

Voluntary credit markets are aimed at attracting private investment in nature by choice, whereas regulatory markets provide credits to those (e.g., developers) who need to meet their compliance obligations to address adverse effects on biodiversity.

The concept of credit markets can be appealing for landowners, community groups, and conservation projects, looking for an alternative income stream, a sustainable flow of resourcing to fill the ever-increasing conservation ‘financing gap’, or a way to reduce the administrative and reporting load of applying for multiple grants. Or for all these reasons! Nature credit markets can also be appealing to companies looking for reputational benefits, or contributing to Environmental, Social, and Governance (ESG) performance. As a consequence, nature credit markets are gaining traction as a mechanism to attract private finance. There is also an emerging view that markets can support ‘nature positive’ actions and nature recovery. But that entirely depends on the context of the market, specifically whether it is a compliance market to address biodiversity losses or not.

Although it might feel like a similar undertaking to potential credit suppliers (generating and selling credits), it is critical we differentiate between regulatory markets and voluntary markets. While a voluntary market can seek to deliver ‘nature positive’ outcomes, a regulatory market is purely driven by compliance requirements. Replacement of lost biodiversity (getting us back to where we were before the development-induced losses occurred) does not represent ‘nature recovery’, and should not be confused with nature positive actions. A ‘less worse’ outcome is not the same as a positive outcome. Nature recovery outcomes from compliance markets are only possible where regulatory settings are in place (and enforced) that specifically direct a quantified net gain (such as the BNG legislation) and a reliable way of quantifying the exchange.

⟩⟩ What do we know about voluntary credit markets? 

Currently in Aotearoa, we are seeing the emergence of voluntary biodiversity markets concepts (e.g., the Ekos BioCredita Programme and Toha MAHI tradable units, and the other private players in the pilot projects) to channel private investment into pro-nature activities. It is fair to say that that state of play here is embryonic and these initial ventures appear to have a focus on ‘nature-positive’ and can be described as a variation on more traditional conservation philanthropy.

What I am observing in Aotearoa right now is a range of perspectives with ‘caution required’ at one end of the spectrum and ‘unbridled enthusiasm’ at the other, and a load of hopeful optimism and confusion in between. In the face of the dual biodiversity and climate crises and a background context of reduced government funding for nature, it is evident that we need a rethink. But it is precisely because there is so much at stake that we owe it to ourselves to apply due caution. Indeed, international evidence indicates murky ground (see for example, Wunder et al. 2025).

Recently, Manaaki Whenua Landcare Research and Mātaki Environmental released a policy brief exploring eight difficult problems associated with the design and delivery of voluntary biodiversity credit markets. I thought I would reflect on what I heard from the UK experience in the context of each of these ‘difficult problems’. What emerged from my interviews at first glance are five themes (relating to nature markets generally that will also apply to voluntary markets) that broadly reiterate at least some of the challenges identified in the policy brief:

1. Demand matters. Lack of demand was a consistent theme that cannot be ignored. It may be that a voluntary market in Aotearoa ends up quite small, and this may not be a negative thing – but understanding demand and managing expectations will be crucial. Given the well-cited ‘funding-gap’ for conservation it will be counterproductive to signal to potential suppliers (landowners, community conservation groups) that a market will universally provide an alternative easily accessible and plentiful funding source. There is also the very real risk other funding streams may be withdrawn on the belief that the private sector will fill the gap. The private sector will undoubtably play an important part in nature conservation (as it does now), but it will be a contributor not the total solution. Given the importance of understanding demand, it is encouraging that the pilot projects include resourcing to explore this.

2. Trust in the integrity of the market is critical. The private sector needs confidence that the market they are investing in has integrity and rigour, so that their investment is not called into question. This holds true for voluntary markets too. Investors have learned from the voluntary carbon market experience. Risk, uncertainty, trust, and reputation are important considerations and if it’s a ‘wild west’ it will be too risky to attract investors.

3. Markets involve high transaction costs and complexity. A market with integrity brings with it high transaction costs (collecting baseline information, legal work, monitoring, auditing etc.) and the same level of integrity is required whether the market is voluntary or regulated. But a voluntary engagement in the market can lack the motivation to absorb additional costs that comes with a compliance market, which can further reduce demand. It could be tempting within a voluntary market to simplify and reduce costs – risking integrity and trust.

4. Capacity and capability is lacking. A lack of capacity and capability was a universal experience across the board (planners, ecologists, lawyers, council officers, conservation managers etc.), and both at an individual and institutional level. While a voluntary market may require less players (e.g., if operating outside of a planning framework), limited capacity and capability can concentrate the market in the hands of a few and further limit the market.

5. More easily achieved credits can proliferate. Credits that are cheaper, easier, and quicker to generate or secure tend to be favoured over credits that are more expensive, harder, or take longer. Outside of a compliance market, gains delivered through these ‘easy’ credits will of course contribute to benefits but will unlikely deliver the full range and complexity of biodiversity – additional policy settings would be needed to provide for the harder to generate biodiversity (such as rare and threatened species and ecosystems).

⟩⟩ Summing up 

We can probably all agree that current policy settings have failed to halt, let alone reverse, the biodiversity crisis, and funding nature in Aotearoa needs some radical new solutions. However, the evidence before us and past experience shows us that neoliberal conservation (see for example here) has not served nature well. These past failures and the inherently contradictory relationship between capitalism and environmental protection dictate that further use of market-based interventions deserves due caution and critical evaluation – an open mind to testing new ideas but also an open mind to evaluating those ideas against improving nature recovery goals.

If we are to launch into nature credit markets here, our system design and policy settings need to be well-thought through, and steps taken to ensure that the market is not perceived as the silver bullet for nature funding at the expense of all other interventions and incentives.

I eagerly look forward to the outcomes of the pilot projects and what they can tell us about demand and necessary system design to achieve real gains for nature – te taiao – in our Southern Hemisphere context.

Ngā mihi nui to The Catalyst Group for resourcing my trip and carrying the load while I was away, and to all the many folk in the UK, Dublin, and Copenhagen who so generously gave their time and shared their experiences and knowledge.

Are you Aotearoa-based and have questions? Hit me up for a kōrero – a chat – if you’d like dig deeper than this article allows.