A Berlin-based venture capital firm has released its approach to assessing biodiversity impact, although there are gaps in the methodology with some major drivers of biodiversity loss not addressed.
Planet A Ventures released its initial approach to assessing the biodiversity impact of prospective startups on Thursday with a published whitepaper.
The company has historically been a prominent climate tech investor, investing in a range of startups including alternative meat products, a photovoltaic solar company, and a CO2 mineralisation firm.
“When it comes to biodiversity, walking the talk is a real challenge. The economy is complex. Modelling both is complex. Fortunately, scientists are not deterred by complexity but challenged,” said Benedict Buchspies, senior scientist at Planet A Venture on the company’s Linkedin.
“As the first European VC, we developed and implemented a detailed assessment method allowing us to assess a startup’s impact on biodiversity,” he added.
The company said that as a VC the “operational focus” of biodiversity assessment differs from other financial institutions, by investing in a limited number of early-stage investments.
Their approach is to use the Biodiversity Footprint for Financial Institutions and integrate it into their existing life cycle assessment methodology (LCAs). LCAs have historically been used to calculate emissions through a thorough inventory and energy use of specific products and services.
BFFI extends the LCA approach by converting its outputs into a single metric called “Potentially disappeared fraction of species per square metre per year” (PDF.m2.yr), which represents the percentage of species no longer found due to specific human activity. The methodology was originally developed by the Netherlands’ Enterprise Agency, in collaboration with sustainability consultant firm Pre, ASN Bank, and others.
Earlier this week, ASN said that its impact investor fund for biodiversity supported over 3,000 hectares of positive impact, and it released its open-source methodology for measurement.
Planet A said they will only apply biodiversity impact assessment to startups that have a material risk of negative biodiversity impact. In particular, if activity affects the following indicators:
– Freshwater eutrophication
– Freshwater acidification
– Freshwater ecotoxicity
– Marine eutrophication
– Water scarcity
– Human toxicity cancer
– Human toxicity non-cancer
– Particulate matter formation
– Terrestrial acidification
– Land transformation
– Land occupation
The VC firm said that their method allows them to address three out of five of the main drivers of biodiversity. It assesses land use change, climate change, and pollution but invasive species expansion and direct exploitation are not included.
No applicable methods allow for a holistic view of all drivers of biodiversity outlined by the UN, the company claims.
Comprehensive biodiversity assessment is still a major gap for the financial sector, with genetic and ecosystem diversity not covered in any available method, said Planet A. Moreover, several activities such as bottom-trawling, microplastics, and ecosystem fragmentation are not captured by any existing methodology, they said.
On the other hand, the company also said assessing positive impacts on pro-biodiversity startups is also challenging to assess, due to the interoperability of frameworks from site-level monitoring into more holistic approaches.
Venture capital interest in biodiversity-related startups is also growing. Earlier this year, a venture capital firm announced that it will solely invest in companies that aim to address the five drivers of biodiversity loss.
By Tom Woolnough – tom@carbon-pulse.com
** Click here to sign up to our twice-weekly biodiversity newsletter **
