The Biodiversity Consultancy (TBC) has developed a globally applicable tool to assess the potential impact of investments on biodiversity, seeking to catalyse flows of resources towards nature-positive outcomes.
The Biodiversity Impact Assessment Framework (BIAF), designed in collaboration with WWF Switzerland, aims to provide guidance for integrating nature into decision-making, by taking into account both positive and negative impacts across diverse ecosystems and business models.
While the biodiversity crisis is climbing the global political agenda, the lack of a suitable approach to articulating and visualising nature’s impact is preventing investors from considering biodiversity accurately, Sybille Borner, senior advisor of sustainable finance at WWF, said during a webinar on Tuesday.
“We have observed that investors and project managers struggle to understand how a project or investment opportunity will actually impact biodiversity,” Borner noted.
“They are unsure of how to assess, compare, and quantify the impact, and they also have no clear idea how to credibly demonstrate the achieved impact. The BIAF offers answers to at least some of these challenges.”
THE METHODOLOGY
BIAF’s methodology involves identifying impact pathways that directly or indirectly connect planned or actual activities to one of the five drivers of biodiversity loss – changing use of sea and land, direct exploitation, climate change, pollution, and invasive alien species.
As the WWF and the TBC underlined in a paper, the assessment framework addressed two phases, pre-investment and post-investment, aiming to:
- Make consistent comparisons of the potential biodiversity benefits of investment opportunities in business models and projects.
- Track the biodiversity performance of investee companies and projects.
- Support strategic decisions and operational improvements at the investee/project level.
- Help identify opportunities for further biodiversity gains.
- Assess the biodiversity performance of investments at the portfolio level.
- Make informed investment decisions in relation to defined biodiversity objectives.
Those kinds of evaluations will help maximise the efficient use of capital to create biodiversity gains, the paper said.
“Assessments allow the ranking of project alternatives or investment opportunities in relation to expected biodiversity benefits.”
To date, several frameworks have been developed to support corporate biodiversity assessments, including standards for nature-related reporting and disclosures, such as the Taskforce for Nature-related Financial Disclosures (TNFD) and the European Sustainability Reporting Standards (ESRS).
Those tools have recently drawn attention as crucial means to assess biodiversity gains in the context of the emerging voluntary biodiversity credit market.
According to TBC and WWF, the BIAF can be used as a complementary tool to predict and assess biodiversity uplift for crediting schemes.
Borner underlined how human health and economic activities hugely depend on the continuous provision of ecosystem services. However, monitored species populations have been reported to have declined by an average of 69% since 1970.
“A lot of funding is needed, and the BIAF will help to channel the available funds to the most impactful investment opportunity in terms of biodiversity protection.”
Global spending on biodiversity conservation currently stands at around 17% of what is needed to halt biodiversity loss, Borner stressed, with an estimated financing gap of $700 billion per year.
By Giada Ferraglioni – giada@carbon-pulse.com
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