How to Measure the Positive Impact on Biodiversity of an Investment? – White paper

How to Measure the Positive Impact on Biodiversity of an Investment? – White paper

Biodiversity loss and land degradation are two sides of the same coin and need to be addressed simultaneously. One of the root problems in degraded lands is the loss of biological diversity. Biodiversity is often threatened by competing land uses, one of the key themes that the Landscape Approach seeks to address. Investing in sustainable landscapes is often the solution to increase biodiversity and vice versa.

To increase investments in both sustainable landscapes and biodiversity, incorporating those concepts into the financial sector are necessary. Starting with methods to measure the impact of investments on those issues. By gaining insight into the often negative (indirect) impact that finance has on biodiversity, the basis is created to reverse this trend.

Definitions and tools need to be developed and agreed upon before financiers can incorporate biodiversity concerns into their daily decision making, serving as a first key step to familiarize the sector with the issues at stake. Recently, the report on ‘Positive Impacts in the Biodiversity Footprint Financial Institutions’ was published. The project leading up to this report was financed by the Dutch Ministry of Agriculture, Nature and Food Quality and carried out by CREM and Pré Sustainability. This rapport discusses, among others, the Biodiversity Footprint Financial Institutions (BFFI) method. The BFFI, applied by the ASN Bank, can measure the positive as well as the negative impacts of an investment portfolio on biodiversity. BFFI uses data from the Exiobase database to assess the environmental pressures resulting from economic activities that financiers invest in. Using pressure-impact models, these pressures are then translated into the impact on biodiversity.

The BFFI is not the only method available. Related initiatives include ‘STAR’, developed by IUCN, the Business & Biodiversity Offsets Program (BBOP), ‘IRIS+’ of the Global Impact Investing Network (GIIN), ‘ENCORE’ by the NCFA or initiatives such as the Platform Carbon Accounting Financials (PCAF) and Green Bonds. In short, a number of tools and impact assessment methodologies are already available.

This White Paper was produced by the Ministry of Agriculture, Nature and Food Quality of the Netherlands and CREM for the session at the GLF Investment Case 2019 in Luxembourg.

Author:

Publisher: Ministry of Agriculture, Nature and Food Quality of the Netherlands and CREM

Language: English

Year: 2019