A pilot multi-tool study revealed that a list of top 250 high-impact companies based on the MSCI World Index is potentially responsible for 73% of the biodiversity impact of the entire index. This pilot study was done with four different biodiversity footprinting providers and coordinated and launched by the Finance for Biodiversity (FfB) Foundation, a global investor-coalition and co-lead of the Technical Advisory Group of Nature Action 100 (NA100), during a public webinar on 13 April.

Anne-Marie Bor, Co-Founder of FfB Foundation, said: “This multitool analysis kickstarts gaining information on the most impactful economic sectors on biodiversity. The high impact of 250 out of 1,564 MSCI index companies means that investors can already bring substantial change with dedicated and focused corporate engagement efforts.”

The results will be used by investors of the FfB Foundation, with currently 60 members globally, for their company engagements.

“Investors need this type of information for collaborative action on engagement with companies, impact assessment and target setting on nature. The analysis also lays the foundation for further collaboration with the four footprinting tool providers of the study. We are looking forward to doing an updated analysis with them to also look into dependencies and company performances on biodiversity,” Bor said.

The analysis shows that biodiversity impact involves a variety of sectors and industries beyond well-known climate risk sectors, such as the food and beverage and materials sector.

Liudmila Strakodonskaya, responsible investment analyst at AXA Investment Managers and co-chair of the FfB Foundation’s Impact Assessment working group was involved in the multi-tool study. She commented: “This new study provides important additional insights in terms of industries’ impacts on biodiversity, leveraging on existing scientific knowledge and the current developments of tools. Investors may use the conclusions of the study to identify the key biodiversity risk areas and hot spots in terms of sectors and companies within their portfolios. Engagement with those industries will then be key to ensure transformative change and transition to less nature-intensive business models.”

The FfB Foundation led the study and partnered with Globalbalance, a UK environmental consultancy firm. Advisors to the study were consulting company Arcadis and the Partnership for Biodiversity Accounting Financials (PBAF).

The analysis is advancing the current state of biodiversity impact research as it establishes a common ground between the tool providers. It combines relatively mature biodiversity footprinting approaches currently available for portfolio assessment and various ways of assessing impact on biodiversity in one result.

Annelisa Grigg, Director and Sustainability Advisor at Globalbalance, explained: “Approaches for biodiversity footprinting are maturing. This study has been invaluable in promoting information exchange and encouraging common ground across the tools. Such common ground will be increasingly important as footprinting methods mature and demands for robust data, which can give insight into biodiversity risks and opportunities, increase.”

The multi-tool study funder Natasha Matic, Director at Global Commons Alliance’s Accountability Accelerator, said: “This analysis is an important step in building strong accountability architecture to hold corporations and financial institutions accountable for their nature-related actions. It is also a wake-up call to investors to start preparing their portfolio companies beyond climate risks to also nature and biodiversity risks.”

As company data on actual biodiversity impact is not available yet, the tools measure potential impact rather than actual impact by using company revenues, product footprints (related to drivers of loss) and region-specific sector averages.

The four frontier footprinting tools calculate biodiversity footprints of corporations based on life cycle analysis (LCA) and a subsequent biodiversity model to estimate a company’s impact on biodiversity loss.

This included the BIA-GBS tool, which is co-owned by Carbon4 Finance and CDC Biodiversité, a subsidiary of Caisse des Depots; the CBF tool, which was developed by Iceberg Data Lab in cooperation with I Care; the BFFI tool, developed by Dutch ASN Bank, Dutch consultancies PRé Sustainability and CREM; and the GID tool, which builds on natural capital methodologies by True Price, a Dutch NGO, and was developed in collaboration with Wageningen Economic Research. Additionally, the sector tool ENCORE was applied to verify the results.

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