For decades, carbon credits have dominated environmental strategies by allowing companies to offset their CO₂ emissions through the purchase of carbon credits and the financing of carbon capture and sequestration projects, as well as emissions-reduction projects. However, as relevant as this approach may be, it still overlooks an essential dimension: how ecosystems function and the preservation of biodiversity.

The truth is we have taken ecosystems for granted — a misperception with potentially disastrous consequences. Without fertile soils, clean water, healthy forests, pollinators, or climate balance, ecological collapse will inevitably become an economic, social, and civilizational collapse.

What is the difference between carbon credits and nature credits?

The key difference between carbon credits and nature credits lies in their scope. While the former focus solely on reducing or offsetting greenhouse-gas emissions, the latter aim to value nature as a whole — including habitat restoration, species conservation, protection of soils and waterways, and other essential ecosystem services.

Unlike carbon credits, which rely largely on a standardized metric — tonnes of CO₂ equivalent — nature credits are based on a more complex assessment with multiple indicators tailored to the specifics of each territory. This approach better captures the true value of ecosystems and the actions that contribute to their regeneration.

What could change with nature credits?

Nature credits are intended to be a new tool that represents a significant step forward in how we approach environmental investment. On 7 July, the European Commission (European Commission) launched the “Roadmap for Nature Restoration Credits,” with the objective of incentivising private investment in actions that protect and preserve nature and rewarding the entities that carry out and finance those actions. This is an ambitious approach aimed at creating a transparent, reliable, and standardised market capable of channelling private capital to where it is urgently needed.

This mechanism can mobilise the much-needed investment to bridge the enormous environmental financing gap, estimated at €65 billion per year in the European Union. Without the active involvement of the private sector, meeting the conservation and restoration objectives set out will be virtually impossible.

A new risk-management tool

Nature credits represent an investment in nature-positive actions by companies, financial institutions, public entities — and, in some cases, even citizens. In return, investors can benefit from cleaner ecosystems, risk reduction, improved reputation, and greater social acceptability of their projects. Through certification, these credits create tangible financial incentives to invest in biodiversity, providing a common framework that brings confidence and legitimacy to an emerging market.

Financial institutions stand to gain significantly from this approach. Biodiversity loss is now recognised as a material financial risk. Soil degradation, declining agricultural productivity, floods, extreme droughts, or pest outbreaks — all of these have a direct impact on assets and investment value. In this sense, nature credits emerge as a relevant tool to integrate into risk-management portfolios and sustainable investment strategies.

The importance of this topic is widely acknowledged globally. The Global Risks Report 2025 by the World Economic Forum ranks biodiversity loss and ecosystem collapse as the second most severe risk over the long term (10 years). A clear signal that nature is no longer merely an environmental concern but a central issue for global economic and financial stability.

An opportunity to change course

More than a technical innovation, nature credits are a structural response to a civilisational problem. As warned by Jared Diamond in the book Collapse: How Societies Choose to Fail or Succeed (2005), the history of Easter Island serves as a cautionary symbol. There, an isolated society exhausted its natural resources to the point of collapse, with no ability to turn back.

In this sense, nature credits are not merely a financial instrument: they are a preventive strategy to avoid repeating past mistakes. Applied with technical rigour, scientific integrity, and within a well-regulated market, they can become an effective incentive to restore wetlands, reforest degraded areas, or conserve threatened habitats — and, potentially, to meet the EU Biodiversity Strategy for 2030, which aims to reverse biodiversity loss and restore European ecosystems by 2030.

References

• European Commission (2025). Nature Restoration Credits: Commission sets out roadmap for boosting private investment in biodiversity. Available at: https://ec.europa.eu/commission/presscorner/detail/en/ip_25_1679
• European Commission (2025). Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions – A roadmap for Nature Restoration Credits (CELEX: 52025DC0374). Available at: https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52025DC0374
• Essência do Ambiente (2025). European Commission launches roadmap for Nature Credits to boost private investment in biodiversity. Available at: https://essenciadoambiente.pt/comissao-europeia-lanca-roteiro-para-os-creditos-da-natureza-para-impulsionar-investimento-privado-na-biodiversidade/
• World Economic Forum (2025). Global Risks Report 2025. Available at: https://reports.weforum.org/docs/WEF_Global_Risks_Report_2025.pdf

Article by Mafalda Sousa, Sustainability Consultant at Aliados Consulting.