According to the United Nations Framework Convention on Climate Change, due to the current state of climate change and damage to economies, the next two years will be vital to save the planet from the devasting effects of climate change and biodiversity loss. This means we must take action now. To ensure a sustainable and prosperous future, global climate strategies must focus on creating investment plans that foster climate resilience.
Financial institutions are instrumental in ensuring that we do not reach a point of no return when it comes to our planet. One step they can take to prevent this, is through measuring their corporate biodiversity footprints – and implementing practical and effective measures that that help the world meet international climate standards.
Global frameworks relating to biodiversity loss are making strong progress, such as the Taskforce for Nature on Financial Disclosures. Impactful conferences are addressing these issues, such as the upcoming COP16.. Regulation is moving in the right direction. But to support these new measures, governments, businesses and financial institutions need to realise the power of data, particularly data that measures biodiversity impacts, which can make a significant difference to the future of our planet. Without a global response, gaps will continue to grow, and the world’s most diverse ecosystems could face grave consequences.
Just take a look at climate standards-setting body, the Science Based Targets Initiative’s (SBTi) recent announcement confirming plans to update its standard for corporate net zero target setting, by extending the use of environmental attribute certificates such as emissions reduction credits to help address Scope 3 emissions. The softening of their measures on offsetting shows a lack of accountability to take corporate climate action. Financial institutions can support this momentum, by utilising tools available to them today that measure corporate biodiversity footprints – and curb biodiversity loss for good.
Measuring corporate impact on biodiversity is essential to defend against biodiversity loss and climate change, especially as 85% of the world’s largest companies that make up S&P Global 1200 have a significant dependency on nature across their direct operations.
Data collection
When it comes to assessing biodiversity loss, there is one clear issue: the biodiversity data gap.
Biodiversity loss has for a long time been notoriously challenging to measure, due to the extensive research and data collection on evolving ecosystems, species populations and genetic diversity overtime. Quality biodiversity data is readily available on the market for financial institutions today, and sufficient enough to provide the industry with solid indicators that can assess impact. What is needed is more tools to understand the data to effectively analyse it, and thus act upon solutions to ultimately mitigate biodiversity loss.
For example, our Corporate Biodiversity Footprint (CBF) tool at Iceberg Data Lab, enables companies and investors to go a step further than just sector level dynamics – it shows granular company practices across the value chain in terms of biodiversity impact. It also outlines the importance of utilising science-based, transparent data that importantly covers scope 3 emissions.
Measuring biodiversity footprints is a useful starting point for financial institutions when forming engagement agendas. This analysis is valuable in bridging the information gap and forming more meaningful and tailored dialogues with companies. It also helps companies reflect on their negative biodiversity impact, and thus mitigate risk action.
Yes, more comprehensive biodiversity data is essential. However, the strength of corporate biodiversity footprint tools is that they can collect key information about the environment without having to rely on company’s disclosure. By analysing the material flows, pressures, impacts of everything that is consumed and produced according to the life cycle assessment databases, we can enable financial institutions to indicate where the priorities lie, what the big drivers of biodiversity loss are for specific sectors and companies, as well as the revenue streams that are behind them.
As an industry, we must utilise the current accessible data more efficiently, to zero in on what matters most to a specific company or sector from a biodiversity impact perspective. From there, financial institutions can start to form strategic investment decisions that put a permanent stop to biodiversity loss.
