Demonstration Projects

Demonstration projects

DP12

Nature risk screening tools in finance: a review of knowledge gaps in biodiversity metric

Nature risk screening tools in finance: a review of knowledge gaps in biodiversity metric
Nature risk screening tools in finance: a review of knowledge gaps in biodiversity metric
Nature risk screening tools in finance: a review of knowledge gaps in biodiversity metric
Main objective

Understanding existing biodiversity metrics, measurements, Key Performance Indicators (KPIs), and the knowledge gaps that hinder their transformation into effective nature risk screening tools for financial actors.

Expected outcome

A review of knowledge gaps in biodiversity assessment tools for finance.

Recently, there have been many commercial applications on the market that provide biodiversity measurement approaches to assess nature risk for financial institutions. Moreover, financial institution nature-related financial disclosure metrics and targets and KPIs are under rapid development and testing i.e. by the Task Force for Nature-related Disclosure (TNFD). 

The scope of DP12 will feature three research hypotheses (H):

  • H0: Global assessment tools use minimum common denominator metrics for biodiversity to ensure comparability across assets globally. (Biodiversity information gap)
  • H1: Metrics or assessment tools do not consider biodiversity status and impact against legal and regulatory requirements in the country hosting operations. (Regulatory gap)
  • H2: Biodiversity at risk in operations locations even if reported at corporate reporting level is not aggregated by commercial providers of assessment tools at the level of an investment portfolio of a financial institution. (Assessment gap)

The methods that will be used within the DP are literature review, stakeholder board meetings and expert tool reviews.

Scientific Partner: Partner Cover