If Bloomberg Assesses Nature, You Can Too: Act Now to Prioritize Biodiversity

BloombergNEF: Graph of BloombergNEF Biodiversity Funding Priority Regions in 2024

Biodiversity, such as species and habitats, is the foundation of all ecosystems. The responsibility to prevent loss in biodiversity falls on corporations that benefit from nature's services. Implementation of biodiversity and ecosystem measures demonstrate important action taken by companies to prioritize nature assessments. As emphasized by Bloomberg, nature and climate display intrinsic differences. Corporations must work to create strategies that directly address biodiversity loss, while favoring nature-focused investments that produce trackable outcomes.

Why This Matters

• Financial Risks: Estimated $44 trillion endangered by the decline of biodiversity and ecosystems.

• Biodiversity Decline: Biodiversity loss (loss of pollinators, for instance, affects crop yields and food security) acts as a large threat to the corporate sector because most businesses rely on the ecosystem to produce its resources.

• Ecological Impacts: Based on the Refinitiv Data below, increased levels of consumption result in a higher ecological footprint per country, demonstrating the need for corporations to invest in biodiversity conservation.

Graph of Ecological Footprint measured in Global Hectare (GHA) per person, Nature and Biodiversity. Source: LSEG Refinitiv.

What is the Relationship Between Nature, Business, and the Public?

The financial loss associated with decreasing biodiversity acts as a leading risk for many corporations. Agriculture and construction are two of the most prominent industries that heavily rely on nature, particularly in China, the US, and the EU.

GDP has a large dependency on nature, as issues like water quality and disease control rely on stable and healthy ecosystems to adequately support the people within them. Sectors that heavily depend on nature make up of 15% of the world’s GDP. Not only does biodiversity investment benefit corporations, but it also benefits the public to prevent biodiversity loss.

Spotlight: Water

Source: wri.org/aqueduct

25 countries are subject to extremely high rates of water stress each year. This is happening because the demand for water exceeds the supply. The lack of water investment demonstrates a risk for individuals and private businesses.

Water is not only used as a means for survival, as many industries rely on water for production. Sectors in agriculture and energy production are directly impacted by increasing water stress. England, Mexico, and South Africa are a brief example of the many countries experiencing water shortages. This example of global insecurity caused by nature demonstrates the need for biodiversity tools so that businesses can adequately address arising issues.  

What are examples of Biodiversity Metrics and Finance Tools?

Valuing biodiversity extends beyond climate and carbon measures.  More recently, investors and corporations have acknowledged that biodiversity loss is an issue for business. Biodiversity tools such as Voluntary Biodiversity Credits (VBCs) and High Integrity Forest Investment Initiative (HIFOR) Units are used as a way to restore nature through finance.

A VBC display a unit of biodiversity outcomes that are evidenced-backed and measurable. Though the market for these credits is new, VBCs represent a nuanced restoration-finance tool. These credits have the potential to increase investments in biodiversity for many corporations and demonstrate a long-term ecological result. A HIFOR unit is one hectare of a tropical forest in a conservation landscape. A HIFOR unit is an investment committed towards forest conservation. These emerging nature tools create avenues for businesses to transition into biodiversity and ecological investments.

Take Action

Financial tools that focus on biodiversity can act as a catalyst for closing the gap between nature and corporations through valuing ecosystems and making them investable. For this market to succeed, businesses must prioritize the commitments to biodiversity even beyond carbon policies, incorporate credits as discussed into their business model, and invest in projects geared towards preserving biodiversity. There are many ways that sectors can transition to nature-based investments. Bloomberg is effectively doing this, and so can you!

Other Ways to Integrate Biodiversity Metrics into ESG

There are many other ways to integrate commitments to biodiversity and the ecosystem in finance and business. Through ecological footprint measures, biodiversity policy commitments, and ecosystem dependency assessments; corporations have options when transitioning to nature commitments.

• UCN Red List Actions              

  • Species-specific conservation measures

• Ecological Literacy Programs

  • ESG Skills Training

• Identifying biodiversity impacts

  • Ecological Recovery Trackers

  • Pollution Removal Efforts

  • Land-use Change

• Ocean-use change

• Freshwater conservation