The last decade has witnessed an emerging number of tools, best-management guidelines, indices and benchmarks that aim to encourage the corporate world, including the financial services sector, to take account of social, environmental and governance issues. A large number of these tools and guidelines address aspects such as climate change, waste and energy use. The issue of biodiversity, however, has only recently started to be addressed. This project aims 1) to provide an overview of the guidelines, management systems, etc that have been developed so far; 2) assess if there is any evidence that biodiversity is a material risk for financial institutions (i.e. a business case); 3) gather opinions on the need/usefulness to develop a biodiversity benchmark and based on these views develop a draft framework which, at a later stage, can be used as a benchmark.
Biodiversity is often defined as the diversity within species, between species and of ecosystems (CBD, article 2).Although comprehensive, it might not always be a useful description when communicating with the business community. For businesses, biodiversity would be more useful when defining it as the economic value of natural or ‘ecosystem’ services that are sustained through the complex simultaneous interaction between many species that has long been integral to economic success, and is now at risk from growing biodiversity loss.www For the purpose of this report, biodiversity comprises defined ecosystems (i.e. forests, wetlands, drylands, etc) as well as biodiversity-related ecosystem services.xxx It also includes climate-mitigating policies that are focused on (terrestrial or marine) carbon sinks.yyy
Does your company have policies in place (e.g., guidelines, codes, principles) that requires screening of investments in new funds/ projects or loans to companies on any biodiversity-related issues (e.g., forestry, wetlands, species impact, climate mitigation3)? Are these policies applied company wide or service specific (e.g., asset management, project finance)? The Equator Principles, for example, have been primarily developed for project finance.
Have you/your company come across any evidence that links impacts on biodiversity (either in positive or negative sense) to positive or negative business performance (e.g., in terms of reputation, shareholder value, liabilities, etc)?
In your opinion, do you believe there is a business case for biodiversity from the perspective of your company? If so, for what reasons is biodiversity (becoming) a material risk or opportunity?
What is your opinion towards developing a biodiversity benchmark:
Would it be a useful tool for your company? If so, in what sense? What type of information are you interested in?
What departments/units within your company would be most interested?
In developing a benchmark, on what type of financial service/activity should it be focused (e.g., investment banking, project finance, hedge funds)?
Would you be interested to remain involved with the further development of this benchmark?
Thank you very much for your cooperation! A copy of the report will be send to you! Ivo Mulder (email@example.com).
www F&C Asset Management, 2004. Is biodiversity a material risk for companies?
xxx See Millennium Ecosystem Assessment (2005). For example: Timber, fuel wood, genetic resources, and pollination, among others.
yyy Insufficient accounting of forests as carbon sinks led to the exclusion of it in the Kyoto Protocol mechanisms (i.e. Clean Development Mechanism) despite the understanding that 18% of climate change is due to deforestation.
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