This document discusses lessons learned from biodiversity offsets associated with the Ambatovy project in Madagascar. It finds that (1) while offsets can provide biodiversity benefits by reducing threats, they will also have local social costs unless accompanied by significant and well-targeted micro-development investments. It also finds (2) there is poor understanding of how social performance standards apply to offsets. Specifically, the standards require addressing social impacts and providing compensation for loss of assets and livelihoods. The conclusion is that conservation has local social costs, and companies need to consider these costs for offsets in the same way as for main projects to achieve environmental justice and comply with regulations.