Expert assessment: Finland has an exceptionally strong foundation for nature markets

The Ministry of the Environment has published an international expert assessment of Finland’s voluntary biodiversity offsetting system, which was introduced in 2023. Biodiversity offsetting means compensating for harm caused to biodiversity by human activity in one location by enhancing biodiversity elsewhere.

Voluntary biodiversity offsetting is provided for in Finland’s Nature Conservation Act. Offsetting is a measure of last resort, used only when harm cannot be prevented or mitigated by other means.

The aim of the expert assessment was to compile an independent overview, based on international experience, of the strengths and risks of Finland’s biodiversity offsetting system and to identify opportunities for its further development. It also provides a view on how the indicators, rules and methods of the Finnish model can be applied in emerging nature markets.

The study was conducted by Sophus zu Ermgassen, a researcher at the University of Oxford.

“Finland’s offset system is an internationally-leading effort to build an ambitious system. It has been developed in close collaboration with some of the world's leading offset scientists, many of whom are based in Finland. The Finnish system has serious potential as a system, but we’ll only know for sure once projects have been implemented and we’ve had the chance to monitor and check the compliance of the first generation of offsets. The scientific community will be watching how it develops with great interest”, says zu Ermgassen.

“An external scientific assessment provides valuable information, based on international experience, on the strengths of Finland’s biodiversity offsetting system and the risks that need to be managed. These findings also support the further development of nature markets and help build their credibility,” says Emma Terämä, Director of the Biodiversity and Nature Value Finance Unit at the Ministry of the Environment.

The report was prepared at the invitation of the BOOST research consortium, which is funded by the Ministry of the Environment and the Strategic Research Council.

A solid regulatory regime and extensive co-creation support the reliability of the system

According to the assessment, the key strengths of the Finnish system are its stable and clear regulatory regime and legal permanence. The co-creation process, which is exceptionally extensive by international standards, and the strong scientific basis support the acceptability and reliability of the system. 

The assessment identifies a lack of demand and shortcomings in long-term monitoring as the most significant risks in the Finnish system. International experience shows that offsetting systems often fail to achieve their objectives without robust long-term monitoring. Monitoring makes it possible to verify the system’s impacts and ensure that its rules are followed. From a market perspective, there is also a risk that strict requirements, combined with the voluntary nature of the scheme, may limit the emergence of demand.

Support for the further development of nature markets

The assessment also supports the development of emerging nature markets. By examining Finland’s biodiversity offsetting system, it helps to identify which of the system’s strengths should be retained and strengthened. The assessment concludes that the Finnish model provides a solid foundation and valuable insights for the development of nature markets and, more broadly, nature value units in Finland and the EU. At the same time, it helps to identify critical areas for further work, such as monitoring and practices that generate demand.

On 1 June, the Ministry of the Environment published a national roadmap for nature markets, setting out a vision and concrete steps for developing Finland’s nature markets through to 2035. The roadmap was drawn up in collaboration with a wide range of stakeholders.

Inquiries 

Jouni Laveri
Senior Specialist
tel. +358 29 525 0221
[email protected]

Ex-ante stress-test of Finland’s new biodiversity offsetting system | Publication archive Valto

Recording of the presentation event on the BOOST research project website: Recording: Evaluation of the Finnish biodiversity offsetting system – BOOST