Foreword

This BSI Flex 701 v2.0 (March 2025) is a UK-led specification developed with government and industry input to establish high-integrity requirements for nature markets. It forms part of the Nature Investment Standards Programme and is intended as an evolving framework supporting further thematic standards and market development.

Introduction

Nature markets aim to address market failures that undervalue environmental benefits, contributing to degradation. The UK faces a significant funding gap exceeding £6 billion annually to restore nature by 2030. High-integrity markets are required to attract investment, avoid environmental harm, and ensure confidence.

These markets rely on measurable environmental outcomes (e.g. biodiversity units, CO₂e), but face risks such as irreversibility of damage, uncertainty in measurement, and conflicting claims. Transparency, fairness and robust governance are essential to maintain trust and effectiveness.

Scope

The standard defines requirements for designing and operating nature markets, focusing on generating, trading and storing credits. It aims to ensure consistency, integrity and positive environmental outcomes, while mitigating risks such as greenwashing and unintended harm.

It applies to market participants, intermediaries and registries but excludes project-specific methodologies, measurement techniques and broader reporting obligations. It is UK-focused but may inform international markets.

Terms, definitions and abbreviated terms

Key concepts include additionality (benefits beyond baseline conditions), credits (tradable units of environmental outcomes), and registries (systems tracking ownership and status). Definitions clarify mechanisms such as stacking, bundling and double counting, which are critical for ensuring market integrity and avoiding duplication of claims.

Principles shared across market participants

Transparency is central, requiring disclosure of material information such as credit type, status, measurement methods and ownership. Information must be accessible, proportionate and retained for extended periods.

Quantification methods must be robust, science-based and comparable across time and locations. Governance structures must be transparent and independent, with clear processes for managing conflicts of interest.

The framework emphasises timely information disclosure, openness to innovation and recognition of multiple environmental benefits. These principles support informed decision-making, accountability and continuous improvement in market practices.

Selling credits

Sellers are responsible for ensuring credit integrity, including demonstrating additionality against a defined baseline and verifying environmental outcomes. Credits must result from actions that would not otherwise occur and must comply with legal and financial additionality tests where applicable.

Validation and verification processes are required to confirm delivery of outcomes and adherence to standards. Sellers must avoid unintended consequences such as environmental harm or leakage of impacts to other areas.

Credits must deliver lasting benefits for at least their defined lifetime, supported by management plans and financial provisions. Mechanisms such as buffers, insurance or corrective actions are recommended to address risks of underperformance.

Engagement with local communities is required, including transparency on management plans, impacts and benefit-sharing arrangements.

Purchasing credits

Ownership and status of credits must be recorded in registries. Credits must be retired before being used for environmental claims to prevent double counting.

For compliance markets, credits used to offset permanent damage must also be permanently retired. Responsibilities transfer with ownership, ensuring continuity of obligations.

Registries

Registries play a central role in ensuring transparency, tracking credit lifecycle and preventing fraud or double counting. They must uniquely identify credits, record ownership, provide transaction histories and maintain data over extended periods.

Information must be accessible, consistent and interoperable across markets to support oversight and comparability. Governance of registries must be independent, and charges should be transparent and proportionate.

Trading processes

Markets should enable broad participation through accessible technologies and transparent information.

Stacking of credits is permitted where additionality, quantification and verification are clearly demonstrated for each credit type. This may require advance disclosure or re-baselining where additional actions occur.

Double counting is prohibited; credits must not be sold for overlapping periods or duplicated across registries. Systems must ensure that environmental benefits are counted only once at any time, maintaining credibility and preventing misrepresentation.