The underlying BIC metric, developed by academics working at Queen Mary University of London and Bar-Ilan University, is given by a simple formula that quantifies the positive and negative effects that interventions in nature have on the mean long-term survival probability of species.
The credits are generated by BGCI's international member organisations by rebuilding the populations of tree species at high risk of extinction under the IUCN Red List methodology.
This mirrors the situation with carbon credits, which are designed to quantify avoidance or reductions of atmospheric carbon dioxide load but in practice are estimated using a broad variety of context-specific methodologies.
Depending on the kind of intervention, the system affected and the available data, a variety of methods is available to estimate BICs.
In projects that aim to rebuild the population of a single endangered species
For use over large areas, approximations expressing BICs in terms of Range Size Rarity,[7] Potentially Disappearing Fraction (PDF) of species,[8][9] or combinations thereof are available.
[1] As a simple interpretation, the BIC metric measures the equivalent number of endangered species whose populations have been restored or (for negative BIC) the number of species that should be restored to achieve net zero biodiversity impact.
[1] However, the BIC metric goes beyond simply counting the number of threatened species that have been restored.
It takes into account that decline or recovery of a species can be the result of many small impacts by different actors and attributes both positive and negative credits accordingly.
Specifically, it is constructed such that, according to a simple model, BIC > 0 implies that the underlying intervention or combination of interventions leads to a reduction of mean long-term global species extinction risk for the taxonomic or functional group considered.
[1] According to the same model, a perfect market for BICs would lead to near-optimal allocation of resources to long-term species conservation.
Traditional biodiversity conservation efforts can lack scalability and are hard to measure: Improving one area of land or river has a different impact on local biodiversity from improving another, so their impacts are difficult to compare.
BICs were developed with the aim to simplify assessments of biodiversity change by focusing on reducing species' extinction risks.
BICs are designed to address Target 4 of this framework ("to halt extinction of known threatened species ... and significantly reduce extinction risk" and Target 15: "[Take measures] to ensure that large transnational companies and financial institutions [...] transparently disclose their risks, dependencies and impacts on biodiversity ... in order to progressively reduce negative impacts.
"[10] The Task Force on Nature-related Financial Disclosures via their LEAP methodology recommends use of BICs to quantify impacts on species extinction risk in version 1.1 of their disclosure recommendations.
The BIC methodology was one of four recognised metrics for assessing extinction risk.
Countless species rely on native trees for survival, including fungi, lichen, insects, birds and other vertebrates.
[11] Repopulating native tree species improves local biodiversity,[12] helps prevents soil erosion,[13] conserves water and helps cools the planet[14] as well as being a carbon store.
[15] BGCI developed the GlobalTreeSearch database which is the only comprehensive, geo-referenced list of all the world's c.60,000 tree species.
[18] Even before BICs were are launched, over 400 rare and threatened tree species had already been conserved in over 50 countries.
[19] One of the critical components of the BIC system is that it is being driven by conservation organisations like BGCI and their international network of members, and backed by theoretical analyses by several Queen Mary University London academics.
[1] These organisations provide the practical know-how and decades of experience in species conservation, focusing particularly on native trees which play a pivotal role in local ecosystems.
[1] This is crucial for engaging financial institutions and other large corporations that require streamlined, global, comparable, and straightforward metrics to set their sustainability goals.
[24] Biodiversity credits have also been criticised as a way for companies to make false sustainability claims, a practice called greenwashing.
[25] Since February 2024, a Biodiversity Net Gain policy has been in place in England.