Short answer
The answer, before the reasoning
GRI 101 expects organisations to apply the biodiversity mitigation hierarchy in sequence: first avoid negative impacts, then minimise impacts that cannot be avoided, then restore or rehabilitate affected ecosystems, and only after those steps consider offsets for residual negative impacts. Restoration and rehabilitation occur in the area affected by the organisation’s activities; offsets are interventions in areas not affected by those activities.
Compensation is a broader term and is not automatically a biodiversity offset. Neither an offset nor an additional conservation project erases the underlying impact, removes it from the impact inventory or justifies skipping avoidance and minimisation.
━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━
Why this question matters
Biodiversity disclosures can become misleading when every positive action is described as “restoration” or when an offset is presented as if the original impact no longer exists. A tree-planting project outside the affected landscape may be valuable, but it does not necessarily restore the damaged ecosystem, compensate for the same biodiversity features or meet good offset practice. The reporting team must preserve the sequence, location and residual-impact logic.
Disclosure 101-2 requires organisations to describe avoidance, minimisation, restoration and rehabilitation, offsets, transformative actions and additional conservation actions. It also asks for site-level restoration areas and offset-specific goals, locations, good-practice principles and third-party certification or verification. The quality of the public disclosure therefore depends on technical evidence from project design, ecology, GIS, stakeholder engagement and monitoring — not only on narrative drafting.
Quick orientation
- Applies to
- Organisations with material biodiversity impacts at sites or in supply chains, including development, extraction, infrastructure, agriculture, manufacturing and sourcing.
- Primary decision
- Which action belongs to which stage of the hierarchy, what residual impact remains and what evidence supports any restoration or offset claim.
- Key sources
- GRI 101: Biodiversity 2024, especially Disclosure 101-2; GRI 3: Material Topics 2021; GRI 1 reporting principles.
- Common confusion
- A positive conservation action is not automatically restoration, compensation or an offset, and an offset does not make the original impact disappear.
1. The mitigation hierarchy is a sequence, not a menu
GRI 101 describes a hierarchy of steps: avoidance, minimisation, restoration and rehabilitation, and offset. The organisation should prioritise avoidance, minimise impacts when avoidance is not possible, implement restoration or rehabilitation where impacts cannot be avoided or minimised, and use offsets only for residual negative impacts after the earlier measures. Transformative and additional conservation actions sit alongside or beyond the hierarchy but do not replace it.
Figure 1. The biodiversity mitigation hierarchy. The narrowing shape reflects the expectation that later measures address impacts remaining after earlier measures.
In practice
| Stage | Core question | Location / scope — Reporting evidence |
|---|---|---|
| Avoidance | Can the impact be prevented before the activity or decision occurs? | Alternative site, design, timing, sourcing or decision not to proceed. — Alternatives analysis, decision record, no-go criteria and avoided footprint. |
| Minimisation | How can duration, intensity or extent be reduced where avoidance is not possible? | Activity and affected area; operational controls. — Control design, expected reduction, implementation and monitoring. |
| Restoration / rehabilitation | How will the affected ecosystem recover or be stabilised? | Area affected by the organisation’s activities. — Goals, hectares, reference condition, stakeholder engagement, monitoring and long-term management. |
| Offset | What residual impact remains and how will an intervention elsewhere address it? | Area not affected by the organisation’s activities. — Residual impact, offset goal and location, additionality, equivalence, permanence, certification/verification, co-benefits and trade-offs. |
| Transformative / additional conservation | What systemic or additional positive action is taken beyond managing the organisation’s negative impacts? | Inside or outside the value chain and affected area, depending on action. — Purpose, partners, outcomes and clear separation from mitigation of the underlying impact. |
2. Avoidance: prevent the impact before it occurs
Avoidance actions anticipate and prevent negative biodiversity impacts. In project development, avoidance can mean selecting a different location, redesigning infrastructure, changing construction timing, excluding sensitive habitat, changing a product or sourcing decision, or not proceeding where an irremediable impact cannot be justified. Avoidance is not the same as controlling a smaller impact after the footprint has been established.
In practice
| Avoidance decision | Evidence to retain | Weak claim to avoid |
|---|---|---|
| Alternative location selected | Comparative ecological assessment, sensitive-location map, decision criteria and approval. | “The project avoids biodiversity impacts” when only one habitat was avoided and others remain. |
| Footprint redesigned | Original and revised footprint, affected-area comparison and design approval. | Calling a smaller footprint “restoration”. |
| Timing changed | Species/season evidence, work calendar and compliance/monitoring controls. | Assuming timing eliminates all disturbance. |
| Supplier/product excluded | Traceability, sourcing rule, supplier screening and implementation coverage. | Claiming group-wide avoidance where traceability is incomplete. |
| No-go decision | Impact assessment, irremediability reasoning, governance decision and alternative plan. | Omitting the prevented impact from the decision narrative so the value of avoidance cannot be understood. |
3. Minimisation: reduce impacts that could not be avoided
Minimisation reduces the duration, intensity or extent of a negative impact that remains after avoidance. It can include pollution controls, invasive-species prevention, wildlife crossings, reduced water withdrawal, construction buffers, lighting restrictions, erosion control or supplier practice changes. The organisation should explain why avoidance was not possible and what the minimisation measure is expected to achieve.
In practice
| Minimisation element | Reviewer question |
|---|---|
| Impact and driver | Which direct driver or pressure is being reduced, and for which biodiversity feature? |
| Avoidance rationale | What earlier avoidance options were considered and why was residual activity necessary? |
| Control design | How does the measure reduce duration, intensity or extent? |
| Implementation | Who is responsible, when did the control begin and where is it applied? |
| Effectiveness indicator | What monitoring result demonstrates whether the measure works? |
| Remaining impact | What impact remains after minimisation and why? |
4. Restoration and rehabilitation: related but different
GRI 101 distinguishes restoration from rehabilitation. Restoration is the process of assisting the recovery of an ecosystem that has been degraded, damaged or destroyed. Rehabilitation stabilises terrain, supports safety or aesthetics and returns the area to a useful purpose in the regional context. Both are applied in the area affected by the organisation’s activities. Similar actions taken in an area not affected by the activities are reported as offsets or additional conservation, depending on purpose and residual-impact linkage.
For each site with the most significant biodiversity impacts, Disclosure 101-2 requires the organisation to report the area under restoration or rehabilitation and the area restored or rehabilitated, in hectares. The organisation should also describe goals and stakeholder engagement. The figures should be linked to the affected ecosystem and the most significant sites identified elsewhere in GRI 101, rather than reported as an unconnected group total.
In practice
| Dimension | Restoration | Rehabilitation |
|---|---|---|
| Primary objective | Assist ecosystem recovery towards a defined ecological reference or trajectory. | Stabilise and make the area safe or useful, with ecological improvement that may not recreate the prior ecosystem. |
| Typical evidence | Reference ecosystem, species/habitat goals, ecological indicators and long-term trajectory. | Terrain stability, erosion control, safety, vegetation establishment and agreed future use. |
| Location | Affected ecosystem or site. | Affected area or site. |
| Success test | Ecological condition, composition, structure, function and resilience relative to goals. | Stability, safety, function and stated ecological/land-use outcomes. |
| Reporting risk | Calling revegetation “restoration” without a reference condition or ecological outcome. | Presenting basic site stabilisation as full ecosystem recovery. |
5. Compensation is not automatically a biodiversity offset
The term “compensation” is used broadly in environmental and human-rights practice. It can refer to financial or non-financial remedy for affected people, replacement of lost access or services, community benefits, land-related arrangements or measures intended to balance environmental loss. GRI 101’s formal mitigation sequence, however, uses the term “offset” for interventions in areas not affected by the organisation’s activities that address residual negative biodiversity impacts.
In practice
| Term | Working distinction | Why the distinction matters |
|---|---|---|
| Compensation | A broad remedy or balancing measure; may concern people, livelihoods, access, cultural values or environmental loss. | A payment or community project does not demonstrate biodiversity equivalence or offset quality. |
| Biodiversity offset | A defined intervention outside the affected area linked to residual biodiversity impacts after earlier hierarchy steps. | Requires a residual-impact basis, ecological goal, location and good-practice assessment. |
| Restoration | Recovery action in the affected ecosystem or area. | Cannot be relabelled as an offset merely because it produces a positive outcome. |
| Additional conservation | Positive action beyond management of the organisation’s negative impacts. | Should not be used to claim that residual impacts have been mitigated. |
| Remedy for affected stakeholders | Action intended to restore or compensate for harm to people or rights. | Must be reported and evaluated on its own terms; it is not a substitute for ecological mitigation. |
6. Residual impacts: the bridge to any offset
An offset claim is not credible unless the organisation first identifies the residual negative impact left after avoidance, minimisation and on-site restoration or rehabilitation. The residual-impact statement should explain the affected biodiversity feature, location, magnitude or condition, duration, uncertainty and why further earlier-stage mitigation is not feasible.
In practice
| Residual-impact field | What to document |
|---|---|
| Affected biodiversity feature | Ecosystem, habitat, species, ecological function or ecosystem service. |
| Location and area | Coordinates, affected area, landscape/seascape context and protected/sensitive status. |
| Baseline / reference condition | Pre-impact condition or justified reference state and data source. |
| Impact pathway | Activity and direct driver creating the impact. |
| Avoidance and minimisation applied | Options assessed, measures implemented and evidence of effectiveness. |
| Restoration/rehabilitation contribution | Expected recovery and time lag in the affected area. |
| Residual magnitude and duration | Quantitative or qualitative remaining loss, including uncertainty and irreversibility. |
| Affected stakeholders | Communities, Indigenous Peoples, resource users and relevant engagement/FPIC. |
| Offset rationale | Why an offset is considered and which residual features it is intended to address. |
7. What GRI 101 asks organisations to report for offsets
For each offset, Disclosure 101-2 requires the organisation to report its goals, geographic location, whether and how good offset-practice principles are met, and whether and how the offset is certified or verified by a third party. Guidance also recommends describing offset type, project phase, delivery deadlines, conservation goals, co-benefits and trade-offs.
In practice
| Offset disclosure element | Evidence and control |
|---|---|
| Goal | Residual biodiversity feature addressed, no-net-loss/net-gain objective if used, target condition and time horizon. |
| Location | Coordinates, ecosystem, market/jurisdiction and relationship to the affected site. |
| Additionality | Evidence that outcomes are new and would not occur without the offset, beyond legal obligations. |
| Ecological equivalence | Justification that gains address biodiversity features equivalent to the residual losses. |
| Permanence | Legal, financial and management arrangements maintaining gains for the duration of the loss. |
| Project phase and deadline | Design, implementation or completion status; milestones and delivery dates. |
| Monitoring and outcome | Indicators, baseline, verified progress, underperformance and corrective action. |
| Certification / verification | Standard, provider, scope, date and limitations of third-party review. |
| Co-benefits and trade-offs | Carbon, livelihood, cultural or ecosystem-service benefits and any adverse effects. |
| Stakeholder rights | Engagement, land/resource rights, grievance and FPIC where relevant. |
8. Additional conservation and transformative actions
Transformative actions seek systemic change inside and outside the value chain. Additional conservation actions aim to generate positive biodiversity impacts beyond management of the organisation’s negative impacts. GRI 101 explicitly states that additional conservation actions should not be used to manage the organisation’s negative impacts. The report should therefore present them as additional contributions, not as a substitute for avoidance, minimisation, restoration or offsets.
In practice
| Action | Possible disclosure | Do not claim |
|---|---|---|
| Landscape research partnership | Partners, objective, location, knowledge output and conservation outcome. | That research alone offsets a site impact. |
| Community conservation programme | Rights, co-design, beneficiaries, ecological outcome and long-term governance. | That community benefit automatically creates ecological equivalence. |
| Sector sourcing initiative | Systemic driver addressed, supplier reach and measured change. | That participation eliminates the organisation’s own supply-chain impacts. |
| Circular business-model action | How resource demand and direct drivers are reduced across the value chain. | That a future model change cures current residual impacts. |
| Voluntary protected-area support | Additionality, governance and outcome. | That the protected area is an offset unless formally linked and assessed against residual impacts. |
9. Location-specific evidence is essential
Biodiversity is location-specific. A hectare restored in one ecosystem is not automatically comparable with a hectare affected elsewhere. The evidence pack should connect each action to site coordinates, ecosystem type and condition, species or ecological features, affected stakeholders, direct drivers and monitoring results. Aggregated global totals can supplement this evidence but should not replace it for the most significant sites and offsets.
In practice
| Evidence category | Minimum practical content |
|---|---|
| Site register | Coordinates, legal entity, activity, area, ecosystem and sensitive-location status. |
| Baseline | Primary survey or secondary/modelled dataset, date, resolution, method and limitations. |
| Impact footprint | Area, direct driver, duration, intensity, affected features and cumulative context. |
| Alternatives analysis | Locations/designs considered, criteria, decision and approval. |
| Mitigation action register | Stage of hierarchy, owner, date, location, objective and expected effect. |
| Restoration/rehabilitation plan | Reference condition, hectares, milestones, monitoring and stakeholder engagement. |
| Residual-impact assessment | Remaining loss after earlier measures and uncertainty. |
| Offset record | Goal, location, equivalence, additionality, permanence, phase, deadline and verification. |
| Stakeholder evidence | Engagement, rights, FPIC where relevant, grievances and response. |
| Outcome monitoring | Indicator, baseline, result, variance, corrective action and independent review. |
10. Build the case from impact to disclosure
Figure 2. Case evidence chain from baseline to public disclosure. Each later-stage action should be traceable to the residual impact left by earlier measures.
Define the impact case. Identify the site, activity, ecosystem, biodiversity feature, direct driver, affected area and stakeholders.
Record avoidance alternatives. Preserve options considered, reasons for selection or rejection and governance approval.
Design minimisation measures. Link each control to the impact pathway and define effectiveness indicators.
Plan restoration or rehabilitation in the affected area. Set goals, hectares, reference conditions, milestones and engagement arrangements.
Assess the residual impact. Describe remaining magnitude, duration, uncertainty and why further earlier-stage action is not feasible.
Design any offset. Link it to the residual feature, test good-practice principles, specify location, delivery schedule and verification.
Separate additional conservation and stakeholder compensation. Explain their purpose without using them to erase the impact.
Draft a balanced disclosure. Report the original impact, action stage, implementation status, outcomes, limitations, trade-offs and residual impact.
11. Hypothetical infrastructure case
A transport project initially crosses a wetland used by migratory birds and a community for seasonal fishing. The project team compares three routes and selects one that avoids the highest-value habitat but still affects a degraded wetland edge. Construction timing is changed to avoid the main breeding period, lighting is reduced and sediment controls are installed. These are avoidance and minimisation measures.
The affected wetland edge is restored using a reference condition and five-year monitoring plan developed with ecological specialists and local resource users. After expected restoration gains, a residual loss remains because part of the habitat function will be unavailable for several years. The organisation proposes an offset in a connected catchment, with a defined goal, additionality evidence, ecological-equivalence assessment, long-term land-management arrangement and independent verification. A separate livelihood payment to fishers is reported as stakeholder compensation/remedy, not as the biodiversity offset. A regional conservation partnership is reported as an additional action and is not counted against the residual loss.
In practice
12. Illustrative disclosure wording
| Annotation | Why it strengthens the disclosure |
|---|---|
| Avoided area and alternatives | Avoidance is evidenced rather than asserted. |
| Affected and restored hectares | The location and scale of restoration are clear. |
| Goal and interim result | Action is separated from outcome. |
| Residual impact | The reason for considering an offset is visible. |
| Offset location, goal and status | The project can be assessed against GRI 101 requirements. |
| No erasure statement | The underlying impact remains transparent. |
| Additional action separated | Positive action is not double counted as mitigation. |
In practice
14. Common misleading claims
| Claim | Why it can mislead | More defensible pattern |
|---|---|---|
| “All biodiversity impacts are fully offset.” | No residual-impact, equivalence, time lag, uncertainty or outcome evidence. | Describe the residual impacts, offset scope, method, status, limitations and verified outcome. |
| “We restored 100 hectares.” | The location, affected area, reference condition and success criteria are absent. | Distinguish area under restoration from area meeting the stated restoration criteria. |
| “Tree planting compensates for habitat loss.” | Species, ecosystem function and ecological equivalence may differ. | Describe the actual action and avoid offset terminology unless residual-impact linkage and quality are demonstrated. |
| “Our community fund delivers biodiversity net gain.” | Social compensation and ecological gain are conflated. | Report community remedy and biodiversity outcome separately. |
| “The project is nature positive because it supports a conservation charity.” | Additional action does not manage the project’s negative impact. | Report the impact hierarchy and additional contribution in separate sections. |
| “No net loss was achieved at project completion.” | Offset and restoration outcomes may require long time horizons and verification. | Report current status, time lag, monitoring results and conditions for the future claim. |
In practice
15. Common mistakes
| MISTAKE 1 | Starting the disclosure with the offset rather than the original impact and earl |
|---|---|
| Why it happens | The positive project is easier to communicate than the residual-loss analysis. |
| Why it matters | The report creates an impression that harm was avoided or erased. |
| Correction | Present the impact, avoidance, minimisation, restoration/rehabilitation, residual impact and offset in sequence. |
| Evidence of correction | Mitigation-case record and residual-impact assessment. |
In practice
| MISTAKE 2 | Calling any revegetation “restoration”. |
|---|---|
| Why it happens | Area planted is used as the only success indicator. |
| Why it matters | The disclosure overstates ecosystem recovery. |
| Correction | Define the reference condition, ecological goal, trajectory, indicators and area meeting criteria. |
| Evidence of correction | Restoration plan and monitoring results. |
In practice
| MISTAKE 3 | Treating a financial payment as a biodiversity offset. |
|---|---|
| Why it happens | Compensation, remedy and ecological offset are not separated. |
| Why it matters | The underlying ecological loss and stakeholder rights are obscured. |
| Correction | Report financial/social remedy and ecological mitigation as distinct actions with distinct outcomes. |
| Evidence of correction | Remedy record and offset design separately. |
In practice
| MISTAKE 4 | Using an offset without demonstrating residual impact or good practice. |
|---|---|
| Why it happens | The project label or third-party certificate is treated as sufficient evidence. |
| Why it matters | Additionality, equivalence, permanence and delivery may be unsupported. |
| Correction | Link the offset to the residual impact and explain quality principles, status and verification. |
| Evidence of correction | Residual-loss calculation, project design and verification record. |
In practice
| MISTAKE 5 | Counting additional conservation as mitigation of the organisation’s negative im |
|---|---|
| Why it happens | All positive actions are aggregated into one “net positive” portfolio. |
| Why it matters | The organisation bypasses the hierarchy and double counts benefits. |
| Correction | Separate additional actions and do not deduct them from residual impacts unless they meet the offset basis. |
| Evidence of correction | Action classification and claim reconciliation. |
In practice
16. Myth versus reality
| MYTH | “Once a biodiversity offset is purchased or certified, the original impact is ne |
|---|---|
| REALITY | An offset is a later-stage intervention for residual impacts after earlier mitigation measures. The organisation should continue to report the underlying impact, residual loss, offset goal, location, quality, status, verification and limitations. Certification does not remove the impact from the impact inventory. |
| Why the confusion arises | Carbon-market language and net claims can create an expectation that a unit cancels the historical or location-specific impact. |
| Practical consequence | Keep gross impact, mitigation action, residual impact and offset outcome as separate, traceable records. |
In practice
18. Related standards and indicator mapping
| Framework / disclosure | Relationship | Use in this article |
|---|---|---|
| GRI 101: Biodiversity 2024 — 101-2 | Direct | Mitigation hierarchy, restoration/rehabilitation areas, offset goals/locations/quality/verification and stakeholder impacts. |
| GRI 101: Biodiversity 2024 — 101-4 to 101-7 | Supporting | Location data, significant sites/products, direct drivers and ecosystem condition. |
| GRI 3: Material Topics 2021 — 3-3 | Supporting | Actions, effectiveness, stakeholder engagement, policies, commitments and management of the material topic. |
| GRI 1: Foundation 2021 — Accuracy, Balance and Verifiability | Supporting | Balanced claims, methods, evidence and limitations. |
| GRI 2: General Disclosures 2021 — 2-25 to 2-27 | Related | Processes to remediate negative impacts, grievance mechanisms and compliance information. |
| External offset/restoration good-practice sources | Implementation | Detailed design, no-net-loss/loss-gain calculations and project quality beyond the GRI reporting requirements. |
Restoration or rehabilitation takes place in the area affected by the organisation’s activities and seeks ecological recovery or a useful, stable condition. An offset is an intervention elsewhere that addresses a defined residual negative impact only after avoidance, minimisation and on-site restoration or rehabilitation have been applied.
Compensation and biodiversity offsets are not equivalent. Compensation can include financial or non-financial remedy, replacement of lost access or services, community benefits or other balancing measures, whereas an offset is a defined ecological intervention outside the affected area linked to residual biodiversity impacts after earlier mitigation steps.
An offset does not remove the original impact from the GRI report. The organisation should continue to report the underlying impact, residual loss, offset goal, location, quality, status, verification and limitations; certification does not remove the impact from the impact inventory.
Questions
Questions people ask
What is the order of the biodiversity mitigation hierarchy?
GRI 101 expects organisations to apply the biodiversity mitigation hierarchy in sequence: first avoid negative impacts, then minimise impacts that cannot be avoided, then restore or rehabilitate affected ecosystems, and only after those steps consider offsets for residual negative impacts. Restoration and rehabilitation occur in the area affected by the organisation’s activities; offsets are interventions in areas not affected by those activities.
What is the difference between restoration and an offset?
Restoration or rehabilitation takes place in the area affected by the organisation’s activities and seeks ecological recovery or a useful, stable condition. An offset is an intervention elsewhere that addresses a defined residual negative impact only after avoidance, minimisation and on-site restoration or rehabilitation have been applied.
Is compensation the same as a biodiversity offset?
Compensation and biodiversity offsets are not equivalent. Compensation can include financial or non-financial remedy, replacement of lost access or services, community benefits or other balancing measures, whereas an offset is a defined ecological intervention outside the affected area linked to residual biodiversity impacts after earlier mitigation steps.
Does an offset remove the original impact from the GRI report?
An offset does not remove the original impact from the GRI report. The organisation should continue to report the underlying impact, residual loss, offset goal, location, quality, status, verification and limitations; certification does not remove the impact from the impact inventory.
Can additional conservation be counted as mitigation?
A separate livelihood payment to fishers is reported as stakeholder compensation/remedy, not as the biodiversity offset. A regional conservation partnership is reported as an additional action and is not counted against the residual loss.
Sources
Primary sources
Take it with you
The checklists as a working spreadsheet
Every checklist and table on this page, with empty status, owner and evidence columns for your team to fill in and keep.
✓ LRA AI Assistant · Human-in-the-loop
Ask about this guide
It answers from this page, and reaches into the linked disclosure cards when your question is about the standard itself. Your first two answers are free without signing in.
Go deeper · GRI
GRI Standards Certified Training
A full reporting cycle with a mentor: impact inventory, threshold, Topic Standard selection, Content Index and assurance readiness.
Available as Guided Flex, Live Cohort, 1:1 Expert Mentorship or Corporate Programme.
