A few weeks ago we ran a Twitter and Linkedin poll asking what environmental (the ‘E’ in ESG) issue you would like to know more about. Biodiversity & ecosystem management was the winner receiving 44% of the vote.
In this article, we have curated a list of resources on this critical issue. As Altiorem grows, we will be including content like this across the range of ESG issues.
We have broken these articles into frameworks, for understanding the issues and how financial institutions can approach managing them. Company assessments, which can give investors and banks an independent view of company performance next to its peers. And lastly, risk assessment resources which allow you to see the current state of the issue through different lens, in particularly with the excellent mapping tools available today.
Frameworks
- A good starting point to approach biodiversity is the Connecting Finance to Natural Capital: a Supplement to the Natural Capital Protocol report. The report defines the issue, provides guidance on setting a scope, measurement, and implementing strategies to reduce biodiversity impacts. This would be categorised as “implementation” in the Altiorem library.
- The Organisation for Economic Cooperation and Development (OECD) report on the biodiversity economic and business case. As the name suggests this OECD report, provides the economic and business case for addressing biodiversity issues and would be categorised in those in areas in the Altiorem library.
- While a bit older, the 2014 International Union for Conservation of Nature (IUCN) report provides a more technical review of reporting standards in relation to French reporting standards in in its Corporate Biodiversity Reporting and Indicators Situation Analysis & Recommendations report.
Company assessments
There are a growing number of NGOs and investor groups who rate company performance on a range of issues, while we have not found an all encompassing biodiversity rating, there are a number which cover forests for different industries. We recommend using a mix of sources where possible and using them as input for engagement and further analysis rather than assuming any single rating tool holds all the answers.
- Global Canopy’s Forest500 ranks companies and financial institutions on their supply chain forest-risk.
- A separate organisation also called Canopy, do their Hot Button Ranking report for the textiles and the fashion industry.
- CDP, similar to their famous carbon work also conducts an annual forest survey of companies.
- Spott performs company assessments on palm oil, rubber, timber and pulp.
Risk assessment
While the loss of biodiversity and the extinction crisis is a global concern, exacerbated by global issues like global heating, many of the impacts are felt locally in individual biomes, with some more vulnerable than others. The first three tools below provide location specific way of determining biodiversity vulnerability and risks. While the last tool can help financial institutions ensure their processes are adequate for identifying and managing key risks.
- Integrated Biodiversity Assessment Tool (IBAT) is an amazing data set for identifying biodiversity hotspots, for example, if a company is planning to start a mine or expand operations into a new region. The tool also allows more informed engagement with companies on their approach to biodiversity.
- IBAT also has detailed country profiles, useful for sovereign bond investors.
- The brilliant Resource Watch database includes a number of map overlays including biodiversity hotspots.
- Global Canopy (party to the Natural Capital Protocol) have a finance program that includes the Soft Commodity Risk Platform or SCRIPT that is a step by step risk assessment banks and other financial isntiutions can take.
While there are diverse and useful resources on biodiversity and ecosystem management, more resources are required on ocean ecosystems, and the impact chemicals and other pollutants have on biodiversity.
If you’ve found these resources helpful visit Altiorem where you’ll find interesting ESG research on biodiversity and many more sustainable finance issues.
