Combining several indexes largely focused on species abundance and diversity is the most efficient way for companies to assess biodiversity risks and impacts, according to French-headquartered bank BNP Paribas.
Released on Thursday, research from the bank investigates the three metrics most used or explored by financial institutions in order to measure their portfolio’s biodiversity footprint:
- Mean Species Abundance (MSA)
- Biodiversity Intactness Index (BII)
- Potentially Disappeared Fraction (PDF)
MSA and PDF measure relative species presence in a given ecosystem compared to their estimated abundance and diversity, respectively, if the site were in a pristine state.
Yet, BII provides a more comprehensive measurement of biodiversity loss by giving more weight to species-rich areas in its evaluations.
In its analysis, BNP Paribas pointed out the importance of selecting the right metric based on study objectives and available data.
However, since the three indexes are highly sensitive to sampling efforts and might encompass data quality issues, the bank recommended combining them to get a comprehensive picture of ecosystem health.
“Quantifying the impact of human activity on biodiversity is a difficult task, given the number of interconnected factors at play and the complexity of the very concept of biodiversity, which encompasses a range of dimensions, including a variety of species, ecosystems and genes, and ecological functions,” the report said.
According to the research, BII could compensate for some of the MSA weaknesses as it considers the invasive species’ impact on the ecosystem, while PDF has the potential to minimise some of MSA and BII flaws as its global version takes into account the threat level and endemic status dimensions of species.
“It is obvious that no single index is sufficient for assessing ecosystem health. Instead, their complementary nature emphasises the importance of employing them together to achieve a more comprehensive understanding and a more robust biodiversity evaluation,” said BNP.
The need to quantify risks and impacts is rising among financial institutions and companies, along with the emergence of reporting schemes, both voluntary and mandatory, including the EU Corporate Sustainability Reporting Directive (CSRD) set to enter into force next year.
Voluntary frameworks such as the Global Reporting Initiative (GRI), the International Sustainability Standards Board (ISSB), and the Taskforce on Nature-related Financial Disclosures (TNFD) are increasingly gaining traction among private organisations committed to being nature positive, with the latter announcing 96 new adopters last month.
The France-based bank was one of the early members of the TNFD and took part in the working group established for the official launch of the initiative in 2021.
By Giada Ferraglioni – giada@carbon-pulse.com
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