Critical habitat assessment and biodiversity action plans (IFC PS6)

IFC Performance Standard 6 requires a project to establish whether it affects natural or critical habitat and, depending on the answer, to demonstrate no net loss of biodiversity or a net gain. It is one of the standards that most often drives the financing timetable.

What PS6 requires

PS6 classifies habitats as modified, natural or critical, and calls for the mitigation hierarchy (avoid, minimize, restore and, as a last resort, offset) to be applied with increasing stringency:

• Natural habitat. Mitigation measures must be designed to achieve no net loss of biodiversity, where feasible.
• Critical habitat. The project may proceed only if it demonstrates that no viable alternatives exist outside it, that it will not lead to measurable adverse impacts on the biodiversity values that define it, that there will be no net reduction in populations of Critically Endangered or Endangered species, and that a long-term monitoring and evaluation program is in place. It must also achieve net gains for those values.

The standard also covers legally protected and internationally recognized areas, invasive alien species, ecosystem services and primary production supply chains.

The five critical habitat criteria

1. Critically Endangered (CR) or Endangered (EN) species.
2. Endemic or restricted-range species.
3. Migratory or congregatory species.
4. Highly threatened or unique ecosystems.
5. Key evolutionary processes.

IFC Guidance Note 6, updated in 2019, sets quantitative thresholds for criteria 1 to 4.

How we carry out the assessment

1. Defining the area of analysis. We delineate an ecologically appropriate area of analysis for each biodiversity value; it is almost always wider than the area of influence in the impact assessment.
2. Identifying candidate values. We cross-check the project baseline against the IUCN Red List, national threatened species lists, Key Biodiversity Areas, protected areas and the IBAT tool.
3. Applying criteria and thresholds. We assess each candidate species and ecosystem against the Guidance Note 6 thresholds, consulting specialists where data are scarce.
4. Field verification. Where secondary information is not enough, we define the additional surveys needed.
5. Conclusion and management pathway. We determine which values trigger critical habitat, what residual impacts remain after mitigation and what is needed to achieve no net loss or net gain.

Deliverables

• Critical habitat assessment (CHA).
• Biodiversity action plan (BAP).
• Biodiversity management plan (BMP).
• Biodiversity monitoring and evaluation program (BMEP).
• Offset strategy and loss-gain accounting.
• Review of the biodiversity baseline against PS6.

PS6 and biodiversity offsets in Colombia

In Colombia, the national biotic offsets manual (Manual de Compensaciones del Componente Biótico, Resolution 256 of 2018) steers the offsets required under the environmental license toward no net loss of biodiversity. PS6 asks for something different in critical habitat: net gain, demonstrated for the specific values that trigger it.

This is why an offset plan approved by the environmental authority is not always enough for lenders. We design strategies that bring both obligations together to avoid duplicating effort and investment.