Can Certification Schemes Help Make the Business Case for Nature-Based Solutions?

The term Nature-based solutions¹ (NbS) refers to a wide range of actions that aim to protect, manage, or restore natural habitats while offering many co-benefits for people and the environment.

Companies are increasingly showing interest in taking steps to protect and restore nature, and those with large land use and agriculture footprints will be critical stakeholders in advancing NbS.² However, they often lack a credible framework to guide what actions to take and how to measure and report on the impact of those actions. Several initiatives are underway to develop such a framework.

Certification Schemes Offer a Standard Framework and External Validation

One type of initiative is certification schemes. Certification schemes can be used by different types of companies across the market. They offer a standard framework and external validation, which provides clarity, precision, and third-party assurance. Certification enables corporates to demonstrate progress towards sustainability goals while also signaling to investors that they are proactive about implementing risk management practices. As such, certification schemes could offer a valuable tool to help companies to scale up NbS to reduce the environmental impact of their business operations.

Essential components of a credible certification scheme include:

• An owner or certification organization to run the scheme.
• A credible standard with criteria against which scheme participants can be checked.
• A network of trained certification bodies that provides independent auditors to check the criteria.
• A market incentive that gives a value for claims made to provide a pull for participants to use the scheme. This market pull can be driven by regulatory requirements, investor pressure, or a social and environmental license to operate.

Crucially for credibility, a wide range of stakeholders should be involved in developing the standard criteria to ensure the scheme is widely accepted. This can include companies across the value chain, NGOs, government actors, academia, and civil society. The most credible certification schemes are typically governed by member associations with balanced representation from across these stakeholder groups. ISEAL, the International Social & Environmental Accreditation & Labelling Alliance, provides a framework for best practice³ and credibility.⁴

Certification and NbS

NbS are already integrated throughout many sustainability certification schemes in the criteria that scheme participants are checked against by independent auditors. Criteria typically focus on aspects such as ensuring deforestation-free supply chains to protect biodiversity and natural habitats or implementing best agricultural practices including, for example, regenerative agriculture which can improve the long-term sustainability of farming and increase carbon storage in soils.

Certification is a tool that provides opportunities for corporations to explore NbS with credibility and progress toward their sustainability goals. Independent audits provide the assurance required for corporations to measure progress and report the verification approach. By participating in a credible certification scheme, corporations can build trust among shareholders and customers and improve their reputation with investors.

Existing schemes also have the potential to provide a structure for data collection relating to NbS projects, enabling impacts to be monitored over time and supply chain transparency to be documented. Digital solutions, such as blockchain, may be used to streamline the collection of data to support traceability while ensuring the integrity of certification claims.

Examples of well-known sustainability certification schemes with applicability to NbS

Opportunities for Growth

The development of new certification schemes has increased momentum. In November 2022, the European Commission adopted a proposal for an EU framework⁵ to certify carbon removals, including from sustainable carbon farming. The proposal has rules to recognize certification schemes that can be used to demonstrate compliance with the framework. This level of support will help existing certifications scale their use and impact amongst corporations.

Similarly, the International Union for Conservation of Nature is launching a Global Standard for Nature-based Solutions⁶ that will provide corporations with a framework for verifying NbS that yield desired outcomes. This scheme will make the connection between NbS and certification even more clear, outlining actionable steps corporations can take to make impactful change.

Challenges for a New Area of Certification

Impact measurement is a challenge that corporations face and will need to consider when investing in new areas like nature-based solutions. Certification can help tackle this need for credible, verified data accepted by the market. With credible standards, a network of trained certification bodies, market incentives, and extensive data collection, existing sustainability certification schemes that embody NbS criteria can begin to support the growing interest in this area.

However, capacity building is a challenge for certification schemes and bodies. These schemes need trained individuals on the ground who can perform detailed audits. Similarly, certification schemes need a clear and measurable framework and a willing group of companies willing to try them out. As certification becomes more popular and grows into the rapidly expanding NbS space, additional support and training will be needed. The industry must prepare for this demand in the coming years.

Why Guidehouse?

Guidehouse is well-positioned to advise companies on the path to net zero by introducing NbS to their emissions reduction portfolio and adopting sustainability certification schemes in the value chain. Our approach enables companies to pursue tailored climate strategies with a higher degree of success. These mitigations bridge climate and nature agendas, resulting in a win-win strategy to achieve a net-zero, nature-positive, and equitable future.

¹ https://guidehouseinsights.com/news-and-views/nature-based-solutions-are-the-next-frontier-for-corporate-climate-strategy

² See footnote 1

³ https://www.isealalliance.org/defining-credible-practice/iseal-credibility-principles

⁴ https://www.isealalliance.org/defining-credible-practice/iseal-codes-good-practice

⁵ https://ec.europa.eu/commission/presscorner/detail/en/ip_22_7156

⁶ https://portals.iucn.org/library/sites/library/files/documents/2020-020-En.pdf