Biodiversity over an area equivalent to at least 3,000 hectares was supported by ASN Impact Investor’s biodiversity fund last year, according to the “first” measuring of positive nature impact by an investment manager, it said.
Each euro invested by the €30 million fund protected or restored the biodiversity over approximately one square metre throughout 2022 to a pristine condition, the investor estimated.
The open-source methodology can be used by other nature investors to approximate their positive impacts, it said.
The fund is the first biodiversity-titled strategy to publish its footprint. Iceberg Data Lab has also said it can show positive biodiversity footprints, but investors have yet to publish positive results using the fintech firm.
“We’re extremely proud that we were able to quantify for the first time our positive impact on biodiversity,” said Karin van Dijk, manager of ASN’s Biodiversiteit Fonds.
“I hope it takes away a huge hurdle for other investors, because the first objection we get from other mostly institutional investors is they say they cannot quantify biodiversity impacts so they cannot invest,” van Dijk told Carbon Pulse.
The fund invested in 10 companies last year including sustainable fisheries specialist AquaSpark, regenerative agriculture strategy SLM Europe Silva Fund, and the World Bank’s ‘rhino bond’. Unlike most biodiversity-themed funds, it invests in assets other than listed companies.
NEGATIVE IMPACTS
The footprint calculation also included the fund’s negative impacts, which for each euro invested were equivalent to destroying the biodiversity over 30 square centimetres of land throughout 2022, ASN said.
This harm reflected the portion of the fund’s investees that had not yet converted land from its original usage to regenerative agriculture or agroforestry, for example, it said in an impact report.
Capital in biodiversity-titled strategies tripled to reach $984 mln worldwide last year, according to Environmental Finance. Van Dijk questioned how much of this capital supported nature when over 97% of the sum was in listed equities – large companies responsible for much environmental destruction worldwide.
METHODOLOGY
ASN used its Biodiversity Footprint for Financial Institutions (BFFI) methodology, developed with data provider PRe Sustainability and consultancy CREM, as a starting point for its assessment.
BFFI relies on country- and sector-specific data, instead of actual data, to predict businesses’ information on biodiversity.
“When project data is not available, we use proxies in order to estimate the impact. We gathered as much project data as possible: satellite images of biomass on land, bioacoustics, eDNA, but these technologies are really expensive and still in development,” said van Dijk.
These actual metrics were not yet ready to feed into the positive impact metric, she said. Each project must first have baseline data to reveal any improvements, delaying the use of the information.
The ASN assessments also included certifications for organic farming or from the Forest Stewardship Council as indicators of biodiversity support, along with metrics such as hectares put aside for conservation and water usage, van Dijk said.
The foundation of ASN’s calculation, BFFI, is “far from perfect, but we’re improving it instead of waiting”, van Dijk added.
A “huge shortcoming” is that the investor cannot include more qualitative measures, such as using less antibiotics in its calculation, she noted.
“We know that [these measures] will contribute to biodiversity. But as the methodology is not that far developed we are not yet able to translate that data into square metres.”
By Thomas Cox – t.cox@carbon-pulse.com
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