What’s next for biodiversity data in the finance sector

Insight / 30 Nov 2022

Lisa Petrovic, ENCORE Lead at Global Canopy, explores the need for the ENCORE biodiversity module, a tool created in partnership with UNEP-FI and UNEP-WCMC.

For the first time, biodiversity is now a term heard frequently at sustainable finance conferences around the world, after climate alone has held the spotlight for many years. But while the buzz grows around biodiversity in the conference rooms of the financial world, the buzzing sounds of actual biodiversity on the ground in the world’s forests, rivers, mangroves and oceans is rapidly disappearing: ecosystems have declined in size and condition by 47 percent globally. As financial institutions increasingly understand the urgent need to protect and restore biodiversity, they need data and tools to rapidly turn conversations into effective changes on the ground.

The state of biodiversity data

Biodiversity – the variety of all living things, from genes, through species and populations, to habitats and ecosystems – underpins the goods and services that nature generates for the companies and projects financial institutions lend to, invest in and insure. But biodiversity – and its relationships with financial institutions – is complex. While a lot of data exists on the state of biodiversity itself, data on how biodiversity is relevant to financial institutions that can easily be meaningfully integrated into their decision-making processes has been limited.

The biodiversity-related financial data landscape is however rapidly expanding. While data gaps remain, sufficient data exists for companies and financial institutions to begin identifying their impacts on biodiversity. This data is available from a wide range of governmental, civil society, and commercial sources.

The ENCORE biodiversity module, an extension of the online ENCORE tool for assessing nature-related risks and opportunities, enables financial institutions to explore the potential alignment of financial activities in the agriculture and mining sectors with a biodiversity-positive future.

Identifying and managing biodiversity risks in agriculture and mining is an important first step for financial institutions, as two primary industries that are particularly exposed to biodiversity risks. For example, a private bank wanting to assess the biodiversity risks and opportunities of its agriculture portfolio can use the ENCORE tool to rate threats to species across countries and ecoregions.

Ecosystems have declined globally in size and condition by


Remaining data gaps

Developing the ENCORE biodiversity module unearthed several remaining challenges in terms of biodiversity data availability: lack of location-specific data, lack of corporate disclosures, limited responsiveness of biodiversity data, and the lack of sector-specific scenarios for biodiversity impacts.

Location-specific data is now improving, as satellite technologies and artificial intelligence makes it easier and cheaper to collect and analyse biodiversity data. Corporate disclosures are expected to improve in the coming years, following the release of final disclosure recommendations from the Taskforce on Nature-related Financial Disclosures (TNFD) in September 2023. A third prototype of the framework is currently out for market testing.

Responsiveness of biodiversity data and lack of sector-specific scenarios remain key challenges. Currently, data can’t inform us how a given company’s positive actions in managing biodiversity would lead to an improvement in biodiversity itself, for example by reducing species extinction risks. We need models that quantify how reductions in companies’ pressures on nature lead to improvements for biodiversity. Related to this, we are also lacking forward-looking scenarios that tell us how nature impacts of different sectors today might lead to changes in biodiversity in future. General development scenarios exist, but very few are sector-specific and focus on biodiversity.

Looking ahead to more and better data

The appetite for closing biodiversity-related data gaps for financial institutions is already high – and will likely continue to grow.

A Nature-related Data Catalyst, launched by the TNFD in July this year, already counts more than 100 data providers as members – including Global Canopy and UNEP-WCMC. The Catalyst aims to close nature-related data gaps, including for biodiversity.

In December, the world’s governments will meet at global biodiversity summit CBD COP15, where it is hoped they will adopt a new Global Biodiversity Framework (GBF) with targets for halting and reversing biodiversity loss. This will likely further ramp up the appetite for biodiversity-related data: a first draft of the GBF, released in 2021, includes a target for all businesses to assess and report on their dependencies and impacts on biodiversity. To deliver on that, they need better data. If and when the Global Biodiversity Framework is agreed at CBD COP15, the ENCORE biodiversity module will be updated in line with it.

Explore the ENCORE biodiversity module

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