Biodiversity Offset Strategies
Meeting IFC Performance Standard 6

One of the key challenges of extractive operations based in remote areas include the need to address sensitive biodiversity concerns proactively. This avoids 'red flag issues' for prospective investors and ensures compliance with IFC Performance Standards and Equator Principles. Biodiversity Offset (BDO) solutions can help address both real and perceived biodiversity risks associated with such operations. They can also generate visible and cost-effective project upsides which are valued by key local and international stakeholders.

Although still an emerging field in the international extractive sector, the origin of the concept includes 'Wetland Banking' in the US which was developed several decades ago. It allows developers to offset their expected adverse impacts by contributing to the creation and management of wetlands elsewhere. Leading extractive industry players and projects are already applying biodiversity offset solutions. These solutions are finding increasing acceptance and are often developed jointly with the scientifically oriented conservation/NGO community.
 
Prizma has developed and tested its integrated approach to analyzing and selecting appropriate biodiversity offset options. The approach is designed to maximize biodiversity value creation, facilitate stakeholder acceptance, position feasible solutions within the local regulatory and political context, and ensure cost-effectiveness. This approach also contributes to resolving reputational risks and provides comfort to lenders and insurers for projects located in biodiversity hot spots which trigger IFC Performance Standard 6 (Biodiversity Conservation and Sustainable Natural Resource Management). Read more about a BDO case study developed with Prizma's assistance.

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