New online tool seeks to help companies and investors mitigate biodiversity-related risks and prepare for the reforms that follow the new Global Biodiversity Framework
Conservation group WWF has announced it is launching a new free online tool to help companies and financial institutions identify and take action on biodiversity-related risks across their operations, value chains, and investment portfolios.
WWF unveiled plans for the new tool, dubbed the Biodiversity Risk Filter (BRF), at the World Economic Forum in Davos this week.
The new tool follows the adoption last month of the Global Biodiversity Framework (GBF) at the COP15 Biodiversity Summit in Canada, which saw government's commit to a sweeping package of measures designed to halt biodiversity loss by 2030.
WWF said the private sector has a "critical role" to play in developing the investment and business models which will be needed to achieve the goals of the GBF. However, the conservation group warned that many companies and investors are still struggling to understand the impacts and dependencies of their activities on nature, as well as the policy implications that will flow from the adoption of the new accord. As such, the new tool aims "to bridge that gap" and provide businesses with a more detailed understanding of the nature-related physical and policy risks they face.
The BRF tool will be available online alongside the WWF's Water Risk Filter, which provides an in-depth assessment of the water related risks companies face. WWF said both the tools can be used to help the private sector develop sustainable business operations and investments, as well as support the alignment of companies' and financial institutions' sustainability commitments and engagements with global reporting frameworks such as the Taskforce on Nature-related Financial Disclosures (TNFD), Science-Based Targets Network (SBTN) and the UN Sustainable Development Goals (SDGs).
As part of its research, WWF said it worked with Climate & Company on a series of case studies to assess how companies can use the data to understand risks to both their operations and supply chains.
The results found the vast majority of companies have a medium or high exposure to biodiversity related risks. The case study results also found that by using the BRF tool, companies can start to analyse and identify potential biodiversity-related risk hotspots and prioritise areas for action.
According to the World Economic Forum, more than 50 per cent of global GDP, or US$44tr, is highly or moderately dependent on nature and its services. With nature in crisis, the WWF warned that companies and investors from all sectors are exposed to biodiversity-related risks.
However, understanding biodiversity-related risks and opportunities along the value chain and across different locations using a science-based methodology has been "one of the most challenging tasks for companies and financial institutions striving to develop nature-positive business models", the WWF said.
"Increasingly, companies and financial institutions recognise the business case for tackling biodiversity loss, but many simply do not know where to start," said Rebekah Church, WWF's global biodiversity stewardship lead. "Understanding biodiversity-related business risks is the first step towards being able to tackle them and a prerequisite to setting relevant biodiversity targets, something many companies are likely to look at during this year following the adoption of the Global Biodiversity Framework."
She explained the BRF will help companies to map and assess their biodiversity-related risks, enabling them to prioritise investments which will make the most impact in mitigating those risks.
The BRF is based on over 50 biodiversity-relevant data layers that collectively provide a global, holistic picture of biodiversity-related risk, the conservation group said. As such, it includes information on species and ecosystems, protected areas, and important pressures on biodiversity such as deforestation, habitat destruction, pollution, and land use change for agriculture.
The data for the BRF was provided by WWF, IBAT, IUCN, UNEP-WCMC, ENCORE, RepRisk, FAO, the World Bank, and NASA, among others. According to WWF it is the first platform to bring together such a diverse range of data specifically for the purpose of analysing the biodiversity-related risks to corporates and financial institutions.
WWF said its tool was launching at a time " when there is a growing consensus that we not only need to halt the ongoing destruction of the natural world, but also shift our economies and societies towards ones that exist in harmony with nature".
A separate study published last week by the Inevitable Policy Response also sought to tackle the critical question of how investors can best navigate the risks arising from both biodiversity loss and climate impact.
The IPR warned that the global decline of nature and biodiversity could pose material threats to the global economy that cost as much as $3tr every year from 2030.
Meanwhile, the UN Environment Programme (UNEP) and risk specialist S&P Global Sustainable1 today similarly announced the launch of Nature Risk Profile, a new methodology for analysing companies' impacts and dependencies on nature.
The partners said the new methodology outlines metrics and data that enables companies and investors to identify and quantify nature-related exposures. The methodology covers several key areas, including risks arising from companies' impacts on biodiversity, risks arising from companies' dependencies on biodiversity, and potential risks via proximity to biodiverse areas.
"The methodology provides a major step forward to deliver the actions required for transformative change and support the finance sector's critical contribution to delivering the ambitions of the Kunming-Montreal Global Biodiversity Framework," said Neville Ash, director of UNEP-WCMC. "This methodology links science, policy and finance to bring nature to the heart of financial decision-making. The collaboration with a global financial data provider such as S&P helps to test the methodology using their location-specific data on thousands of financial and corporate assets."
Dr Richard Mattison, president of S&P Global Sustainable1, said companies committed to delivering net zero emissions also had to ensure they were "net positive for nature".
"The development of this new methodology will be key to unlocking better understanding, analysis and action around nature-related risks for companies and investors," he said. "Significantly, the methodology will also be open access, and developed and refined by stakeholders, to support transparency and adoption."
* This article was originally published here
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