The Rise of Biodiversity Impact Accounting in Finance
For years, carbon accounting has been the backbone of sustainable finance, but biodiversity impact accounting is quickly gaining traction. While 50% of global GDP relies on nature’s services (WEF, 2020), biodiversity loss isn’t just about emissions—it’s about impacts on ecosystems, species, and local environments.
Here’s how it stacks up:
Carbon Accounting: Standardized, universal metrics for tracking emissions (Scope 1, 2, 3).
Biodiversity Accounting: Evolving measures, like the Biodiversity Impact Metric and STAR method, that assess ecosystem impacts—but they’re more complex and localized.
The Taskforce on Nature-related Financial Disclosures (TNFD) is developing biodiversity metrics, with support from over 200 financial institutions. Recent funds like HSBC’s Natural Capital Fund are leading the way. For finance, biodiversity impact tracking is the next big frontier—critical for managing risks and unlocking new investment avenues in the race toward a truly sustainable economy.
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