BNG in England and IFC PS6: A Comparison of Approaches
Written by Ellen Miller.
Halting and reversing the global trends in declining biodiversity are increasingly on the agendas of governments, developers and financial institutions (FI). To drive credible methods of understanding biodiversity impact, and importantly, reversing impact through restoration and offsets, biodiversity metrics and markets are being developed on a global scale. In this article, we compare a well-functioning market[1] of biodiversity units in England through Biodiversity Net Gain (BNG) with approaches to demonstrate the “no net loss/net gain” (NNL/NG) requirement commonly found in international lender standards. International Finance Corporation Performance Standard 6 (IFC PS6)[2] represents a long-standing benchmark for biodiversity compliance for projects financed by private lenders or multilateral banks.
Concepts
BNG is embedded in English law through the Environment Act (2021). This mandates eligible development projects (see Table 1) to leave biodiversity in a minimum 10% better state than previously, as quantified using the Statutory Biodiversity Metric (henceforth metric). Compliance is enforced through local planning authorities and secured through legal agreements.
IFC’s PS6 requires a no net loss of natural habitat, and a net gain of critical habitat. PS6 is not a governmental law but rather a standard designed to safeguard biodiversity, driven by lender requirements to finance projects. Compliance is enforced through loan conditions and contractual obligations tied to financing.
Embedded within both approaches is the emphasis on the mitigation hierarchy: avoid, mitigate, compensate, offset as final resort. This requirement is set out clearly within PS6 guidance, and in BNG is embedded within metric and the Best Practice Guidance[3]. However, there are large contrasts in their approach to habitat definitions, evaluations and in the evidencing of a net gain.
Biodiversity Baseline Evaluation
For BNG, the baseline value of a site is summarised in “biodiversity units”, calculated through multipliers. The valuation is fixed within the metric, with habitats scored based upon their perceived rareness and value (“distinctiveness”), comparison to ideal habitats (“condition”), and regional importance (“strategic significance”).
The PS6 NNL/NG applies for projects globally and across terrestrial and marine realms, but no evaluation metric or quantified approach is mandated for use under PS6[4]. The biodiversity value of sites is classified into modified, natural and critical habitat (CH), where CH can occur on both modified and natural habitat types. If a CH-triggering species occurs on low-value modified habitat the area is upgraded to CH irrespective of the habitat’s intrinsic value. The key difference is the assessment of biodiversity on a habitat-only basis for BNG, compared to IFC PS6. Species consideration in England is left to ecological impact assessments[5].
Approaches to offsets
BNG allows for on‑site, off‑site, or statutory biodiversity credits as mechanisms to deliver 10% uplift. The system has thus created a national market for biodiversity units. Critical to evidencing compliance is the use of the Statutory Metric and abiding by rules governing which habitats can be purchased to offset losses.
For PS6, strict requirements apply to any project impacts on CH, and when these are met, NG measures are detailed in a Biodiversity Action Plan. However, as a quantified approach is not mandated, the significance of a “net gain” can be open to interpretation and is up to the author to define. This can lead to a variable approach: NNL/NG must be evidenced through bespoke offsets tailored to the affected species, typically including species specific interventions, landscape scale recovery actions, or targeted habitat creation and restoration, all ensuring adherence to the “like for like or better” principle. This need for specificity decreases the suitability of utilising global biodiversity credits, meaning NNL/NG alone is not a major driver for credit market development, unlike BNG in England.
Table 1: Key information
| Criteria | BNG in England | IFC PS6 Requirements | Pros and Cons |
| Scope of Application |
|
|
Ability to misuse exemption criteria for BNG |
| Metric | Statutory Biodiversity Metric, completed in accordance with the SBM User Guide. | No single metric, although metrics may form a one line of evidence to demonstrate compliance. | Standardising an approach in a metric inherently restricts breadth and depth of factors considered; but allows for comparison. |
| Requirements | 10% net gain in biodiversity units as measured using the SBM. |
|
NG for PS6 open to interpretation and could be as little as >1%, >1 individual of a species; blanket 10% standardised but may limit instances where more could be achieved. |
| Habitat Definitions |
A drop-down list of habitat types are available within the SBM. Based upon the UK Habitat Classification System, although there are notable differences in habitat definitions. |
No habitat classification system is mandated for use. Habitats are categorised[7] into:
|
Lack of species consideration in BNG cited as key disadvantage; broad definitions used in PS6 can be open to interpretation. |
| Habitat Values | Multipliers used to generate numerical values in “biodiversity units”, taking into account:
|
Baseline biodiversity classified into modified, natural or critical habitat. Critical habitat is given the highest value, in terms of NG requirements, followed by NNL requirement for natural habitat.
|
Formulated, fixed approach to habitat values set inside metric reduces scope of applicability (e.g. in non-development settings) |
| Site data used | UK Habitat Classification survey and condition assessment survey on the Site, supplemented by desk-study information to further inform habitat types and strategic significance. |
Typically involves species surveys, desk-study information, baseline habitat studies and a literature review used to understand the site’s potential value to species and habitats. Typically results in a Critical Habitat Assessment. |
Identification of CH and NH determination open to interpretation |
| How offsets are evidenced |
The SBM evidences the provision of onsite and offsite biodiversity units post-development. A Habitat Management and Monitoring Plan (HMMP) is also a key component. Offsite units must be registered on the national biodiversity gain site register and can be purchased on the market. Statutory biodiversity credits can be used as a last resort. |
Evidence of methods to achieve NNL/NG provided in Biodiversity Action Plan and/or Biodiversity Offset Strategies. Requires bespoke actions for species-specific conservation measures and suitable management and monitoring plans. | No mandated quantification in PS6 approach (although widely-used guidance[8] is available) means NNL/NG can be difficult to accurately evidence. |
| Applicability of biodiversity credit system | In place as the BU Market | Bespoke, project-specific nature of offsets may reduce suitability of credits for some projects. | NG can be tailored to NH/CH feature more readily. |
Conclusion
The highly standardised process for BNG has allowed for the development of a functioning market in biodiversity units in England. Engagement in the market can lead to landscape-scale restoration and habitat creation, albeit to primarily offset losses from developments elsewhere. The system relies on a prescribed valuation of habitats occurring on-shore in England, with species occurrence having little influence.
The NNL/NG approach taken internationally avoids standardisation, given the range of biomes globally. Species presence and interaction with sites is embedded at the heart of both the biodiversity baseline assessment and the demonstration of NNL/NG allowing more targeted offsets, however, with no quantified approach mandated the threshold for achieving NG is open to interpretation. Global markets in biodiversity credits are developing, but the degree to which they can be employed specifically for IFC PS6 standards is limited. Drivers for these markets are primarily focused around corporate risk management.
Author Ellen Miller is an Associate Ecologist and Nature-based Solutions Technical Lead at SLR Consulting, where she enjoys working on a range of projects improving outcomes for nature both in the UK and internationally.
References
[1] eftec for The Wildlife Trusts (2025) A well-functioning BNG market Final Report. Eftec, London. Available at: https://www.wildlifetrusts.org/sites/default/files/2025-08/Wellfunctioning%20BNG%20Final%20report%20eftec%20050825.pdf
[2] International Finance Corporation Performance Standard 6: Biodiversity Conservation and Sustainable Management of Living Natural Resources (IFC PS6), https://www.ifc.org/en/insights-reports/2012/ifc-performance-standards
[3] Baker, J (2016) Biodiversity Net Gain Good Practice Principles for Development, CIEEM, IEMA, CIRIA, UK: https://www.iema.net/policy/natural-environment/principles-and-guidance ; https://www.iema.net/policy/natural-environment/principles-and-guidance ; https://www.cieem.net/biodiversity-net-gain-principles-and-guidance-for-uk-construction-and-developments
[4] Another FI, the European Bank for Reconstruction and Development (EBRD), provides guidance on the possible methods of habitat quantification, but this is not common across the FIs.
[5] In a few cases, presence of particular species influences SBM habitat definition, for example as for priority habitat rivers or ponds.
[6] Natural England (2026). Marine Net Gain Assessment Frameworks Report NECR689. HMC, ERM and eftec, London. Available at: https://publications.naturalengland.org.uk/publication/5257266440437760
[7] Descriptions provided in Guidance Note 6 which accompanies PS6
[8] Business and Biodiversity Offsets Programme (BBOP). 2009. Biodiversity Offset Design Handbook. BBOP, Washington, D.C. Available at: www.forest-trends.org/biodiversityoffsetprogram/guidelines/odh.pd