Earth

Open source footprint tools: businesses and investors can now get smarter about nature

Elana Kimbrel Global impact hotspots vary by ecosystem service and biodiversity indicators. Credit: Communications Earth & Environmental (2024). DOI: 10.1038/s43247-024-01797-7

Global economic development has brought many benefits to people around the world, but many of them have come at the expense of nature. However, governments, financial institutions, and businesses are increasingly recognizing that this paradigm undermines the long-term viability of the global economy.

These and other sectors are coming together at the United Nations Conference on Biodiversity (COP16) in Colombia to address the natural crisis, which is widely seen as paralleling and intersecting with climate change. It’s starting to be understood.

As part of a growing shift to address the decline of nature and its impact on humanity (e.g. pollinator decline, natural flood control, carbon storage, clean and available water), Efforts such as a nature task force are underway. Associated Financial Disclosures and Science-Based Goals Network. Supports the tracking and reporting of the private sector’s nature-related impacts and dependencies (in other words, how businesses not only impact, but also depend on, nature).

The tool, jointly developed by the Stanford University-based Natural Capital Project (NatCap) and the Morgan Stanley Sustainable Investment Institute, assesses nature-related risks and opportunities from a company’s physical assets.

In a paper published in Communications Earth & Environmental, the team demonstrated this approach across eight indicators of biodiversity and ecosystem services (the benefits ecosystems provide to people), and compared 580,000 mapped physical assets. It has been applied to more than 2,000 global listed companies with .

The Ecosystem Services Footprint tool provides ESG (environmental, social and governance) metrics for companies focused on their impact on nature, with greater transparency and potential for external verification than many other ESG approaches can.

“This type of information helps investors, companies and others assess and act on a company’s impact on nature. Make more sustainable business decisions, such as avoiding locations that have the most negative impact on nature and people. We hope that this will pave the way for a decision “to capitalize on the demand for more sustainable investments and manage the risks of impacts on nature, such as the loss of social operating licenses.” said Lisa Mandl, scientist and director of scientific software integration.

Other important points

There is considerable variation within all sectors, but on average the largest impacts are felt by companies in the utilities, real estate, materials, and financial sectors.

As an example of this approach, the team applied it to a series of lithium mines that are key to the transition to renewable energy. Researchers used satellite imagery to assess nature’s footprint (how much space they occupy) and their impact on the tangible benefits that nature provides to humans. I researched the geography of the location. This will help determine where this resource can be most efficiently obtained while minimizing impact on the environment and people.

The researchers found that focusing solely on a company’s impact on biodiversity is not representative of its impact on broader ecosystem services, such as water quality and coastal flood risk reduction. Our results highlight the importance of using high spatial resolution information and understanding both ecosystem services and biodiversity values ​​to accurately assess the impacts of companies on nature. . Viewing nature-related impacts in terms of ecosystem services reveals what changes in ecosystems and biodiversity mean for businesses, economies, and societies, and often provides a measure of biodiversity impact. more important to companies.

This approach has the potential to advance ESG measures toward a more comprehensive assessment of the social significance of a company’s environmental impact, as well as the environmental risks to the company.

“This open source tool expands access to natural capital analysis and better connects finance and financial valuation with nature,” said Matthew Slovic, Managing Director and Head of Global Sustainable Finance at Morgan Stanley. “We look forward to helping support the market through increased innovation.” .

Further information: Lisa Mandle et al., An open-source approach to measuring corporate impacts on ecosystem services and biodiversity, Communications Earth & Environmental (2024). DOI: 10.1038/s43247-024-01797-7

Tool case study. Available from the Nature-Related Financial Disclosures Task Force website.

Provided by Stanford University

Citation: Open Source Footprinting Tool: Companies and Investors can now get smarter about nature (October 29, 2024) https://phys.org/news/2024-10-source-footprinting Retrieved October 29, 2024 from -tool-companies-investors.html

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