Global economic development, while providing many benefits to people worldwide, has largely been at the expense of nature. Yet increasingly, governments, financial institutions, and companies are recognizing that this paradigm undermines the long-term viability of the global economy. This month, these sectors and others are coming together at the United Nations Conference on Biodiversity (COP16) in Colombia to address the nature crisis, which is becoming widely understood as comparable to and intersecting with climate change.
As part of the increasing shift to address the decline of nature and its implications for humanity (e.g., loss of pollinators, natural flood control, carbon storage, clean and available water) there have been recent efforts, such as the Task Force on Nature-Related Financial Disclosures and the Science-Based Targets Network, to support tracking and reporting of the private sector’s nature-related impacts and dependencies (in other words, how companies not only impact nature, but depend on it).
A tool co-developed by the Stanford University-based Natural Capital Project (NatCap) and the Morgan Stanley Institute for Sustainable Investing assesses nature-related risks and opportunities from companies’ physical assets. In a new paper published in Communications Earth & Environment , the team demonstrates this approach for eight metrics of biodiversity and ecosystem services (the benefits ecosystems provide to people), and applies it to a set of over 2000 global, publicly traded companies with 580,000 mapped physical assets.
The ecosystem services footprinting tool can provide corporate ESG (environmental, social and governance) metrics focused on impacts to nature, with greater transparency and potential for external verification than many other ESG approaches.
“This kind of information can help investors, companies, and others evaluate and act on corporate impacts on nature. We hope it can open up paths for more sustainable business decisions, such as avoiding sites with the greatest negative impacts to nature and people, or capitalizing on demand for more sustainable investments and managing risks from impacts to nature, such as the loss of social license to operate,” said Lisa Mandle, lead scientist and director of science-software integration at NatCap.
“We hope this open-source tool will help expand access to natural capital analytics, better connect finance and financial valuations to nature, and support the market through increased innovation,” said Matthew Slovik, managing director and head of global sustainable finance at Morgan Stanley.
Read more in this Q&A with Mandle and Slovik from 2023, when the tool was first released. The tool is publicly available here , and a case study on it is available on the Taskforce for Nature-Related Financial Disclosures website.
The Natural Capital Project is a global partnership based out of the Stanford Doerr School of Sustainability and its Woods Institute for the Environment , and the Stanford School of Humanities and Sciences . NatCap’s core partners are the Chinese Academy of Sciences, the Royal Swedish Academy of Sciences, Stockholm Resilience Center, the University of Minnesota, The Nature Conservancy, and WWF.
Communications Earth & Environment
An open-source approach for measuring corporate impacts on ecosystem services and biodiversity
25-Oct-2024