How Institutional Models Shape Inclusion and Collaboration in Biodiversity Markets

Biodiversity markets are increasingly promoted as instruments to close the biodiversity finance gap, yet their implications for social inclusivity and collaborative governance remain poorly understood. England’s new Biodiversity Net Gain (BNG) policy provides a critical case. While previous studies have examined its ecological outcomes, few have explored how different institutional models of habitat banking shape who participates in the market and how collaboration unfolds at the landscape scale. Drawing on participatory institutional mapping and 29 interviews with landowners, conservation organisations, planning authorities, and investors in Oxfordshire, we identify and compare three models of habitat banking: (1) for-profit providers leasing land under conservation covenants; (2) institutional not-for-profits managing land; and (3) individual landowners supported by not-for-profit facilitators under legal agreement with planning authorities. We show that for-profit providers tend to foster inclusive participation through risk-sharing finance but limited local collaboration, while not-for- profits enable collaborative governance that advances strategic, landscape-scale nature recovery yet restricts participation to a narrower set of landowners. These findings demonstrate how institutional design and operational models shape both inclusivity and collaboration, with implications for reconciling individual participation and collective ecological goals in the implementation of biodiversity markets.