Aggregated ecosystem condition metrics remain relevant for measuring the impacts of nature funds despite misunderstandings about their application, French data provider CDC Biodiversite said in a paper on Monday.
CDC Biodiversite addressed “misconceptions” about biodiversity impact metrics, saying that limitations in impact databases should not be confused with metrics’ capabilities, as both sources can aid in developing biodiversity funds.
“A number of biodiversity elements have to be taken into account to build a biodiversity fund, and aggregated ecosystem condition metrics do cover well the ecosystem element,” said CDC Biodiversite, the nature data-focused arm of French public financial institution Caisse des Depots et Consignations (CDC).
“Impacts on ecosystems can be assessed accurately with aggregated ecosystem condition metrics and they should not be ‘tainted’ by the limitations of existing databases, since approaches using them in more accurate ways can be deployed to build biodiversity funds,” it said.
The paper aimed to tackle the view that aggregated metrics summarising impacts on ecosystem conditions are not relevant. Last year, an executive at environmental consultancy Ramboll said mean species abundance (MSA) was “fragile”.
CDC Biodiversite measures corporate footprints through the aggregate metric of MSA, showing biodiversity intactness in an area.
Biodiversity metrics, databases, and qualitative analyses can build a picture of biodiversity fund impacts together, the paper argued.
The limitations of metrics like the Ecosystem Integrity Index (EII), Potentially Disappeared Fraction of species (PDF), and MSA should be distinguished from the shortcomings of databases, it said.
Databases such as Biodiversity Footprinting for Financials (BFFI), Biodiversity Impact Analytics powered by the Global Biodiversity Score (BIA-GBS), and Integrated Biodiversity Assessment Tool (IBAT) were recommended by the research for showing nature hotspots.
However, “at their finest level of sector classification, [databases] can be limited in their accuracy if they do not rely on exhaustive physical data”, it said.
These databases mostly cannot be used to identify best-in-class companies for investment and should be complemented with other data sources to help build biodiversity funds, it argued.
“Regulators could thus clarify that biodiversity funds require more quantitative and qualitative company-specific data – reflecting the impacts of their mitigation and conservation policies and actions – and the coverage of most elements of biodiversity.”
Biodiversity-specific funds surpassed $1.5 billion by the end of 2023, Carbon Pulse reported in March. At the time, few of the funds disclosed their biodiversity footprints.
CDC Biodiversite launched a free version of its biodiversity footprinting tool Global Biodiversity Score (GBS) with limited features earlier this year.
By Thomas Cox – t.cox@carbon-pulse.com
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