Bringing biodiversity impact into business decision-making
A successful global movement for sustainable business depends on understanding the nature-related implications of investment into different companies and sectors. The aim of the Benchmark for Nature is to power the development of a structured, rigorous, and practically useful framework for assessing investor impacts on living nature. Engaging with stakeholders within the sector to catalyse the adoption of nature-related standards, Benchmark for Nature will facilitate standardised reporting, potentially leveraging the sector’s existing efforts into more holistic sustainable financing. The team brings together leading academics from the fields of conservation and data science with practitioners from the fields of sustainable investment, and cutting-edge financial technology to solve this complex issue.
The Benchmark for Nature approach to estimating impact on biodiversity is designed to support and complement existing approaches to addressing the shortfalls in current ESG assessment approaches. The approach combines AI-enabled technologies with biodiversity conservation science to mine open-access data and produce an indicator of the impact on biodiversity of economic activity. This will enable financial institutions to measure the biodiversity impact risk associated with a given investment prospect, and to compare that with others in the sector or geography in an automated way. Benchmark for Nature uses the Drivers-Activities-Pressures-State-Impact-Response (DAPSIR) framework as the underlying model for causal mechanisms. By modelling the full DAPSIR causal chain at various organisational levels, the approach can detect changes in these external drivers as well as changes in biodiversity impact. Using the DAPSIR framework also facilitates specific recommendations for improvement of biodiversity impact in a context in which multiple drivers and pressures are acting on biodiversity, and for reporting on both losses and gains. The modelling approach creates a Bayesian network, which enables the Benchmark to operate even with incomplete data. The aim is to produce an indicator which is comparable across sectors, pressures and geographies. The tool will be open-source and therefore open to technical evaluation by independent experts, but will not require expertise for its implementation. The approach is designed so that compatibility, data integration and transparency can be improved over time by integrating more data types, and incorporating new tools, indicators and databases.
The Benchmark for Nature will be an integrated, structured framework for application by investors in capital allocation decision-making, enabling an understanding of the implications for natural ecosystems and species of investments into specific companies and/or sectors, and with application across all industries and securities.
