Limits to biodiversity offsets

5. Limits to biodiversity offsets

Offsets to address unavoidable residual impacts in KBAs should follow the IUCN Policy on Biodiversity Offsets. In addition to the limits to biodiversityoffsets articulated in the IUCN Policy, and given the importance of KBAs for the global persistence of biodiversity, the following additional guidelines are suggested when the residual impacts affect the biodiversity element(s) triggering the identification of the KBA:

  • Offsets for residual impacts in KBAs should achieve Net Gain on the trigger element(s) affected by the project, such that the element(s) is highly likely to persist in the light of climate change and governance instability.

  • Offset gains should be achieved before impacts occur, or, where offset gains may take time to achieve, offsets should be initiated with clear financing before impacts occur.

  • Offsets should not be used where residual impacts on biodiversity are likely to lead to a site no longer meeting the KBA criteria for any of its trigger elements, except in exceptional circumstances when the offset will demonstrably generate significant gains in the global persistence of each of these elements that exceeds the loss caused by the residual impact.

  • The development and offset should both have obtained the free, prior, and informed consent of any impacted local communities.


How can the World Database of Key Biodiversity AreasTM help? The World Database of Key Biodiversity AreasTM can help in the identification of potential offsets by offering information on the population size or geographic extent of the trigger elements at the impacted KBA and other KBAs, and the threats facing those elements.


More about this guideline

Offsets are the measures taken to compensate for any residual significant, adverse impacts that cannot be avoided, minimised, and restored, in order to achieve No Net Loss or a Net Gain of biodiversity. Offsets can take the form of positive management interventions, such as restoration of degraded habitat or arrested degradation, or averted risk, for example, protecting areas where there is imminent or projected loss of biodiversity.

Several sets of principles have been developed to help govern the planning and implementation of biodiversity offsets (BBOP 2009; Hardner et al. 2015; IUCN 2016). The major principles can be summarised as follows:

  1. Offsets should follow/adhere to the mitigation hierarchy.
  2. There are limits to what can be offset.
  3. Offsets should support landscape-level conservation.
  4. Offsets must provide additional conservation outcomes.
  5. Stakeholder input is critical in offset design.
  6. Offsets should have long-term benefits.
  7. Offset design and implementation must be equitable to all stakeholders.

An offset typically seeks to generate benefits for the biodiversity value(s) impacted by a project. Offsets with these characteristics are known as ‘in-kind’ or ‘like-for-like’ offsets. Sometimes, however, it may be desirable to implement an offset that restores or conserves a biodiversity element of greater conservation value than that which is to be impacted by the project. For example, if a project impacts very common natural habitat in the landscape, it may be desirable to ‘trade up’ to an offset that conserves a rarer and/or more threatened habitat that has been identified as a priority for conservation. Such an ‘out-of-kind’ offset should only be implemented after appropriate consultation with conservation stakeholders to ensure both its technical validity (i.e., that the offset is genuinely of greater conservation value) and its public acceptance (i.e., that stakeholders view the offset as greater in perceived value).

In the context of a Key Biodiversity Area (KBA), as it is a site of global importance and therefore increases reputational risk, biodiversity offsets should be designed and implemented to achieve a ‘Net Gain’ of the trigger element affected by the project. The concept of Net Gain of biodiversity is not new; it was first described as part of the United States Government’s wetlands management policies in the 1970s. Since then, it has evolved to a point where it is now a common objective of private-sector-based conservation management. Net Gain can be defined as a specific target or goal where the potential, and then actual, impacts of a project are outweighed by actions and activities taken to avoid, minimise, and restore the project impacts. Then, if residual impacts remain, those impacts are offset, so that there is a gain in biodiversity value as a result of the operation’s activities (Rainey 2015).

While the theory of Net Gain is straightforward, the actual planning and implementation of Net Gain strategies are often complex and challenging, particularly for companies that have little or no experience in this field. Figure 1 illustrates the biodiversity management stages for implementing an effective Net Gain approach (Aiama et. al. 2015). This five-stage process provides a systemic framework that will enable business projects to develop a Net Gain-driven management strategy for biodiversity conservation issues that will arise if they develop projects within KBAs. Importantly, this framework is not sector-specific, and can be applied to any KBA project scenario.

Figure 1. The five stages required to implement a successful Net Gain biodiversity management strategy (adapted from Aiama et. al. 2015).


With regard to the limits to offsets, IUCN’s Policy on Biodiversity Offsets states that, in certain circumstances, residual impacts on biodiversity (after completing the avoidance, minimisation, and rehabilitation steps of the mitigation hierarchy) cannot be offset. Additionally, there are some components of biodiversity for which impacts could theoretically be offset, but with a high risk of failure. Under these circumstances, biodiversity offsets are not appropriate, and this means that the project as designed should not proceed (See Box 1).


Box 1. Limits to biodiversity offsets

WCC-2016-Res-059-EN - IUCN Policy on Biodiversity Offsets

9. Limits to Biodiversity Offsets

In certain circumstances, residual impacts on biodiversity (after completing the avoidance, minimisation, and rehabilitation steps of the mitigation hierarchy) cannot be offset. Additionally, there are some components of biodiversity for which impacts could theoretically be offset, but with a high risk of failure. Under these circumstances, biodiversity offsets are not appropriate, and this means that the project as designed should not proceed.

At a minimum, offsets must not be used:

  • where impacts are likely to lead to a high risk of driving one or more previously non-threatened species and/or ecosystems into the IUCN Red List Categories of Vulnerable, Endangered, Critically Endangered, Extinct in the Wild, or Extinct, or driving one or more previously threatened species and/or ecosystems into IUCN Red List Categories of higher threat;
  • where the success of the offset action is highly uncertain due to a lack of knowledge;
  • where there is a substantial risk that investment generated by offsets might substitute for, rather than add to, other investment for conservation (‘cost shifting’);
  • where the exchanges involved in the project’s residual losses and the predicted offset gains are considered socially or culturally unacceptable to relevant stakeholders;
  • where the values that will be lost are specific to a particular place, and therefore cannot be found elsewhere and adequately protected or re-created;
  • where the time lag between the residual loss of biodiversity caused by the project and the gains from the offset causes damage that cannot be remediated and/or puts biodiversity components at unacceptable risk;
  • where impacts will occur in internationally and nationally recognised ‘no-go’ areas; or
  • where such action is considered incompatible with IUCN policy and resolutions.


The above parameters align with the following IUCN Resolutions, among others:

  • Recommendation 2.82 Protection and conservation of biological diversity of protected areas from the negative impacts of mining and exploration, adopted at the 2nd IUCN World Conservation Congress (Amman, 2000)
  • Recommendation 3.082 The Extractive Industries Review, adopted at the 3rd session of the World Conservation Congress (Bangkok, 2004)
  • Resolution 4.087 Impacts of infrastructure and extractive industries on protected areas, and Recommendation 4.136 Biodiversity, protected areas, indigenous peoples and mining activities, adopted at the 4th World Conservation Congress (Barcelona, 2008).


References and Resources

Aiama, D., Edwards, S., Bos, G., Ekstrom, J., Krueger, L., Quétier, F., Savy, C., Semroc, B., Sneary, M., and Bennun, L. (2015). No Net Loss and Net Positive Impact Approaches for Biodiversity: exploring the potential application of these approaches in the commercial agriculture and forestry sectors. IUCN, Gland, Switzerland.

BBOP (2009). Biodiversity Offset Implementation Handbook. Business and Biodiversity Offsets Programme, Washington, DC.

Hardner, J., Gullison, R.E., Anstee, S., and Meyer, M. (2015). Good practices for biodiversity inclusive impact assessment and management planning. Prepared for the Multilateral Financing Institutions Biodiversity Working Group.

IUCN (2016), IUCN Policy on Biodiversity Offsets.

Rainey, H., Pollard, E., Dutson, G., Ekstrom, J., Livingstone, S., Temple, H., and Pilgrim, J. (2014). A review of corporate goals of No Net Loss and Net Positive Impact on biodiversity. In Oryx, Vol. 49, Issue 02, April 2015, pp. 232-238.

Temple, H., Edmonds, B., Butcher, B., and Treweek, J. (2010). Biodiversity Offsets: Testing a Possible Method for Measuring Biodiversity Losses and Gains at Bardon Hill Quarry, UK. In In Practice, Edition 70, December 2010. Chartered Institute of Ecology and Environmental Management.

Temple, H.J., Anstee, S., Ekstrom, J., Pilgrim, J.D., Rabenantoandro, J., Ramanamanjato, J.B., Randriatafika, F., and Vincelette, M. (2012). Forecasting the path towards a Net Positive Impact on biodiversity for Rio Tinto QMM. IUCN, Gland, Switzerland.