As the operational, financial and regulatory implications of nature loss become clearer, the need for businesses and investors to quantify biodiversity risk is no longer a nice to have but a must have. Studies currently show that up to $5 trillion could be lost annually due to nature-related risk. As a result of these risks, companies and investors are increasingly expected to disclose their impacts through reporting frameworks and to take steps to avoid and mitigate them.
The 2022 Kunming-Montreal Global Biodiversity Framework (GBF) sets a global goal of halting biodiversity loss by 2030 and restoring degraded ecosystems by 2050. To enable companies to start assessing and reporting, the Taskforce on Nature-related Financial Disclosures (TNFD) ‘locate, evaluate, assess and prepare’ (LEAP) approach outlines a range of metrics for all businesses, including guidance for specific sectors and biomes. These metrics are aligned with the Science Based Targets for Nature (SBTN) to ensure a consistent approach from reporting and initial assessment to practical action.
Evaluating and assessing impacts on nature can be a technical challenge and one that is difficult to communicate across businesses. One common first step to understanding relevant issues is a biodiversity footprint assessment (BFA), a life cycle assessment (LCA) method for measuring the impact of human activities on biodiversity and ecosystems. BFAs are rapidly becoming a valuable tool for both SBTN and TNFD, playing a key role in the scoping and impact assessment phases of each process by helping companies prioritise adverse impacts on nature to develop road maps for their reduction.
BFAs assess land use change, pollution, resource extraction and greenhouse gas emissions, four of the five major drivers of biodiversity loss (see IPBES), allowing companies and investors to feed into impact materiality assessments and target setting for more corporate reporting including TNFD, the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD).
What’s in a biodiversity footprint? MSA and PDF
When we measure greenhouse gas emissions (carbon footprints), we do so with the single common metric: carbon dioxide equivalent (CO2e). Measuring nature is much more complex, and while BFAs offer two metrics for foot printing, they should be considered a proxy for potential impacts rather than a definitive value of biodiversity impact. Still, they have value as a way to prioritise and start the process of digging deeper. These recognised metrics for measuring biodiversity loss are the mean species abundance (MSA) and potentially disappeared fraction (PDF) of species. Simply put:
- MSA estimates the impact of economic activity on species abundance – a score of 100% indicates a fully intact ecosystem, while 0% reflects a completely degraded one
- PDF estimates the impact of economic activity on species richness – the scoring scale is in reverse compared to MSA, so a score of 100% indicates that an area has been completely degraded and no species remain and a score of 0% indicates no change to the natural state.
Both metrics report the impact as an affected area, such as square metres or square kilometres, and the underlying score can be split by different pressure categories, such as pollution to water, soil, urbanisation, crop land transformation, water consumption and climate change. The results can also be presented in monetary terms, making findings applicable to double materiality assessments.
Status of BFA methods
Currently, there are over 60 methods and models of conducting a BFA; however, none comprehensively cover all key aspects of biodiversity (pressures, ecosystems, taxonomic groups, etc.). Most focus heavily on land use impacts and terrestrial ecosystems, with significant gaps in aquatic and marine biodiversity assessment.
There are several stand-out methods that have strong dimension coverage and economic relevance. Product biodiversity footprint (PBF) is praised for addressing a wide range of biodiversity pressures, including often-overlooked factors such as overexploitation and invasive species, making it highly applicable to product-level assessments. IMPACT World+ (IW+) and global extinction probability (GEP) are robust approaches, with GEP providing a rare focus on species extinction risks and IW+ (which translates impacts into the PDF km² metric) covering terrestrial, freshwater and marine ecosystems. Most widely adopted is CDC Biodiversité’s global biodiversity score (GBS), a tool that has been used by corporations, financial institutes and government bodies to quantify their biodiversity footprint. The GBS translates impacts into the MSA km² metric.
Depending on the goals of the BFA, there are a range of methods and models that can be used to meet your requirements.
| Goal of business need | Recommended method or model | Reason |
|---|---|---|
| Assess biodiversity across full value chain (business/finance focus) | GBS or PBF | Good coverage of multiple pressures (land use, overexploitation and invasive species) and strong alignment with business frameworks (TNFD and SBTN) |
| Business-friendly scenario setting and target tracking | GBS or PBF | Supports scenarios, baseline setting and target tracking for disclosures (e.g., CSRD and TNFD) |
| Portfolio-level biodiversity heatmapping | BFM or GBS | Designed to apply at portfolio/territory scale with life cycle and ecosystem service links |
| Capture ecosystem functioning and multifunctionality | GBS or BFM | Measures not just species loss but also ecosystem health and services (MSA and ecosystem processes) |
| Broad, multi-ecosystem coverage (land, freshwater and marine) | IW+ or ReCiPe | Covers different ecosystem types, though marine modelling still needs strengthening in IW+ |
| Measure global species extinction risk | GEP or IW+ | Strong LCA modelling of extinction risks through PDF |
Biodiversity footprint use cases
• Assess biodiversity pressures across Scope 1, 2 and 3 activities.
• Assessment for CDP, TNFD and SBTN reporting and target setting.
• Supply chain biodiversity benchmarking
• Model the impacts of operational and product changes
• Heatmap impacts across portfolios and managed assets
• Understand and quantify financed biodiversity impacts
• Integrate nature in investment decision-making processes
• Identify, avoid, and work towards mitigation with investees
• Develop policies that protect ecosystems and hotspots
• Guide planning, conservation strategies and industrial regulations
• Embed biodiversity considerations into policy frameworks to ensure a coordinated approach to biodiversity protection
BFA strengths and limitations
While MSA and PDF footprints provide a view of operations, supply chain or portfolio impacts and hotspots, these are top-down metrics that are ultimately derived from models based on our best (but incomplete) scientific knowledge of complex human and industrial impacts on nature.
Top-down biodiversity assessments are good for first-pass risk assessment and can form a foundation for future work. However, bottom-up location-specific or species-level evaluations are crucial for informed and impactful action to avoid and mitigate nature-related impacts and risks.
| BFA strengths | BFA limitations |
|---|---|
| Helps to rapidly hotspot biodiversity pressures and therefore potential areas of risk across supply chains, physical assets and financial portfolios without the need for ecological monitoring | No single method captures all biodiversity dimensions (e.g., pressures, ecosystems, species and genetics) in a granular or specific way |
| Methods and application are aligned with corporate reporting and target-setting standards (e.g., CSRD, SBTN and TNFD) | Top-down methods are relatively conservation agnostic (cannot prioritise critical areas without local context) |
| Easy to understand and communicate impacts to non-expert audiences ; majority of corporate BFAs align with carbon reporting methods | Data gaps remain for many taxa (especially marine species) and regions with uncertainties around many key biodiversity hotspots in Africa and Asia |
| Can compute pressures and dependencies for lower data quality tiers such as spend data and product data; making it relatively cheap and easy to use for both low and high maturity users | Reliance on proxies makes comparability difficult; while good for understanding hotspots and material risk areas, they can lack specificity |
Our BFA expertise
Nature Positive is a CDC Biodiversité accredited consultant for GBS assessments and audits as well as a CDC B4B+ Club member. With subject matter experts in nature, climate and human rights, we help corporations, financial institutions and government bodies to conduct double materiality assessments and report impacts, dependencies, risks and opportunities relating to nature. As SBTN expert advisers, we enable businesses to set impactful targets, support operational and supply chain resilience, and plan for business continuity with climate and nature scenario planning.
Get in touch with us to find out how we can help you assess your biodiversity footprint and work with your organisation to deliver benefits to climate, nature, people and business.
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