Global economic development has historically prioritized growth, often sidelining environmental health.
Now, recognizing that this trade-off endangers the long-term economy, sectors worldwide are uniting at the United Nations COP16 Biodiversity Conference in Colombia to address a nature crisis as urgent as climate change.
Efforts to gauge private sector impacts on nature have gained traction.
Initiatives like the Task Force on Nature-Related Financial Disclosures and the Science-Based Targets Network aim to help companies measure how they affect—and rely on—natural resources.
A recent advancement, developed by the Natural Capital Project (NatCap) at Stanford and the Morgan Stanley Institute for Sustainable Investing, is a tool to assess the environmental risks and opportunities of corporate assets.
COP16 brings sectors together, emphasizing nature’s role in economic stability and human well-being.Published in Communications Earth & Environment, this tool evaluates eight biodiversity and ecosystem service metrics across 2,000 global companies, offering transparent environmental, social, and governance (ESG) metrics.
This can influence sustainable investment and risk management, guiding businesses to reduce environmental harm while capitalizing on sustainable investments.
Notably, utility, real estate, and material sectors significantly impact nature. The tool’s application on lithium mines highlights the spatial and environmental footprint of resource extraction.
This approach suggests that incorporating ecosystem service impacts, like water quality and flood risk reduction, provides a fuller picture of corporate activities’ societal importance, beyond mere environmental risk.
Matthew Slovik from Morgan Stanley notes that this open-source tool could broaden access to natural capital insights, linking finance with nature and fostering market innovation.
This evolving focus could drive companies to make environmentally responsible decisions, balancing economic gains with ecological preservation.