Appendices

Nature-related impacts and dependencies

Frameworks like the TNFD's LEAP (Locate, Evaluate, Assess, Prepare) can help organizations understand their dependencies and impacts on nature and how those relationships affect their financial performance.

Term	Definition
Additionality	In the context of nature credits, additionality is the positive impact of a project/intervention that would not have happened without the support of nature credit funding. The principle of additionality plays an important role in giving investors the confidence to engage with the fledgling nature markets and ensuring that tangible environmental benefits are delivered as intended.
Biodiversity	All the different animals, plants, fungi, and microorganisms that co-exist in a particular area.
Biodiversity credit (See also Nature credits)	A verifiable, quantifiable, and tradeable financial instrument that rewards positive nature and biodiversity outcomes (e.g. species, ecosystems and natural habitats) by creating and selling either land-based or ocean-based biodiversity units over a fixed period of time.
Biodiversity financing gap	The difference between the amount currently spent and the amount needed annually in the next 10 years to protect the world's most important biodiversity and the services it provides.
Biodiversity Metric	Biodiversity accounting tool developed by Natural England to calculate biodiversity net gain.
Biodiversity Net Gain (BNG)	A UK government policy approach to development, land, and marine management that leaves biodiversity in a measurably better state than before a development took place.
Biodiversity offsets	A system for assigning a value to a habitat, animal, or plant. The credit or unit can be bought or sold to offset damage being done, creating a financial incentive to conserve natural assets elsewhere.
Monitoring, reporting, and verification (MRV)	A framework for ensuring transparency and accountability in nature finance, e.g. biodiversity credits. It involves tracking, recording, and validating data related to nature-based solutions, ensuring that investments in these solutions can be accurately assessed and verified.
Carbon credit	A carbon credit is a financial instrument that represents a reduction or the avoidance of one tonne of carbon dioxide equivalent (tCO2e) from the atmosphere . Credits are issued by national or international governmental organizations and can be traded via: a regulated market, set by “cap-and-trade” regulations at regional and state level OR a voluntary market, where businesses and individuals choose to buy credits to offset their carbon emissions.
Carbon markets	Created by the Kyoto and Paris agreements, the carbon markets turn CO₂ emissions into a commodity by giving it a price.
Carbon offsetting	A way to compensate for carbon emissions by funding an equivalent carbon dioxide savings elsewhere.
Habitat banks	An area of land where new habitats – like meadows, woodlands, hedgerows, and ponds – are strategically added and managed for the long term to help biodiversity flourish.
Kunming-Montreal Global Biodiversity Framework (GBF)	Adopted during COP15, the GBF supports the achievement of the Sustainable Development Goals and sets out an ambitious pathway to reach the global vision of a world living in harmony with nature by 2050. The Framework sets out four goals for 2050 and 23 targets for 2030, which include: 30% conservation of land, sea, and inland waters 30% restoration of degraded ecosystems, halving the introduction of invasive species USD5B/year reduction in harmful subsidies.
Leakage (in context of nature credits)	The displacement of environmental harm from the project area itself to other locations. Leakage undermines the overall nature-related benefits of the project and erodes the value of the nature credits.
Mitigation/mitigating	The act of limiting, as far as possible, or addressing, the negative impacts of a particular activity.
Mitigation banking	A way to offset the ecological loss of a development project by compensating for the preservation and restoration of a different area.
Mitigation hierarchy	A good-practice framework designed to limit as far as possible the negative impacts on biodiversity from development projects. It is based on a sequence of four iterative actions: Avoid Minimize Restore Offset. Following the steps of the mitigation hierarchy enables developers to take a “nature first” approach, working alongside existing natural features on-site, and resorting to offsetting only when absolutely necessary.
Nature	The concepts of biodiversity, natural capital, ecosystems and ecosystem services.
Nature-based solutions	Techniques that use nature as part of the solution to environmental issues, such as to: mitigate or adapt to climate change manage flood and coastal erosion risk provide healthy, social, and liveable cities or improved water quality.
Nature credits	Verifiable, quantifiable, and tradeable financial instrumenta that reward positive nature outcomes (e.g. species, ecosystems and natural habitats) by creating and selling either land- or ocean-based units over a fixed period of time.
Nature markets	Markets that allow individuals and businesses to pay for the benefits that nature provides, often supporting environmental conservation and restoration efforts.
Nature Positive	Nature Positive is a global societal goal defined as "Halt and Reverse Nature Loss by 2030 on a 2020 baseline, and achieve full recovery by 2050". Delivering the Nature Positive goal requires measurable net-positive biodiversity outcomes through the improvement in the abundance, diversity, integrity, and resilience of species, ecosystems, and natural processes.
Net gain	A measurably positive impact—or “net gain”—on biodiversity, compared to what was there before land development.
"No net loss"	A goal for a development project, policy, plan or activity in which the impacts on biodiversity are balanced or outweighed by measures taken to: avoid and minimise the impacts restore affected areas offset the residual impacts, so that no loss remains. See also net gain and mitigation hierarchy.
Payments for ecosystems services (PES)	Schemes where beneficiaries of ecosystem services pay providers for their stewardship.
Permanence (in context of nature credits)	The timespan for which the environmental benefits/gains of a project are maintained. If the benefits of a project are not maintained over a long enough timeframe, they can be reversed, cancelling out the positive impact of the credit.

Glossary

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