photo by Kate Bielinski

Data is the key in the fight against biodiversity loss

Insight / 28 May 2021

Better access to data for companies and financial institutions could turn the tide on biodiversity loss

In 2020 the planet lost an area of tree cover larger than the United Kingdom – including more than 4.2 million hectares of primary tropical forests. Humanity has already wiped out 83% of wild mammals and half of all plants. In a speech last week the UK Environment Secretary revealed that over a 50 year period the UK lost 97% of its grasslands. Facts like this highlight why events like Biodiversity Day have to be more than just another day in a world calendar.

This year’s slogan, “we’re part of the solution,” has been a common message from world leaders in recent months. There has been much talk of “re-evaluating our relationship with nature” as the UN Secretary General António Guterres puts it. Much biodiversity loss is driven by changes in land use – often to produce a handful of commodities, soy, cattle, palm oil and timber, that are globally traded and financed. That means companies and financial institutions have the power to drive change alongside politicians. And for that data is key.

The data shows us that at current levels forest loss alone is happening at an alarming rate. In April deforestation in the Brazilian Amazon was 43% higher than it was the April before. The information from Brazil’s national space research institute, INPE, showed 2020 was the worst year for deforestation in the region for over a decade. In Indonesia in 2020 an area of forest the size of Los Angeles was lost.

Economic dependence on nature

Data doesn’t just show us the loss. It also highlights our dependence. It is estimated that over half the world’s total GDP – 44 trillion US dollars – is moderately or highly dependent on nature and its services. That means we are destroying something that we need.

Paradoxically scientific data also shows that biodiversity loss is making it harder to produce certain commodities. A paper in Nature highlighted that current levels of deforestation in the Amazon region are reducing rainfall and agricultural revenues. Deforestation for soy actually makes soy harder to grow in the long term.

Turning the tide

In February in his review on the economics of biodiversity, Professor Partha Dasgupta said “a significant portion of the responsibility for helping us to shift course will fall on the global financial system. Governments, central banks, international financial institutions and private financial institutions all have a role to play.” And today there are signs that we are seeing a shift in momentum.

The UK government has promised to create a new legally-binding species target for 2030 which they say they want to become the net zero for nature. The US climate envoy John Kerry said earlier this year that “we can’t reach our global goal of net zero emissions by 2050 without halting deforestation.”

Businesses too are becoming more aware. Earlier this month British supermarkets and food groups signed a letter to the National Congress of Brazil criticising a proposed bill that could “enable faster destruction of the Amazon rainforest” if passed. Shareholders in the Agri-giant Bunge backed a motion at the AGM demanding the commodity trader do more to stop deforestation.

Data doesn’t just highlight the problems. It is also part of the solution. As biodiversity loss rises up the agenda, governments, financial institutions and companies need help identifying how they can change. According to a recent survey 70% of investors say that a lack of available data is a key barrier to making investments supporting biodiversity. 

Data tools

There are tools out there that can help arm governments, companies and investors to act on nature loss. Trase, our joint project with the Stockholm Environment Institute, comprehensively maps supply chains of key commodities, such as Brazilian soy or Indonesian palm oil exports, providing a wall-to-wall map of the central stages of a supply chain. It links consumer countries, and traders with places of production.

ENCORE (Exploring Natural Capital Opportunities, Risk and Exposure) shows businesses across all sectors of the economy how they impact and depend on nature. The new biodiversity module, launched this week, focuses on mining and agriculture and shows users how to turn their financial activities into nature positive ones. 

The Taskforce for Nature related Financial Disclosures, TNFD, also has remarkable potential. It is the sister project to the Taskforce for Climate Related Financial Disclosures, which has been instrumental in improving and increasing reporting of climate-related financial information, and is due to be launched later this year. It will develop a framework for nature-related disclosures across both impacts and dependencies on nature, that will include biodiversity, helping identify where finance needs to shift to nature positive outcomes. The World Economic Forum says nature-positive transitions could generate up to US$10.1 trillion in annual business value and create 395 million jobs by 2030. It’s a win win.

Tools like these are essential but serious data gaps remain.  Commercial agriculture – such as cattle ranching, soy cultivation and oil palm plantations – drives 40 percent of tropical forest loss worldwide. But getting location-specific data – finding out exactly where a commodity is produced is currently not possible. Such data gaps mean we are disconnected from what we consume. There has to be more transparency. Companies should have to know and disclose if any of the commodities they use have harmed nature. Financial institutions must know if any of their money has financed biodiversity loss. It is only then that we become the solution.

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