Responsible Investment News

Calculating value of biodiversity: BNP Paribas Asset Management

Biodiversity is a key topic of discussion during the forthcoming Responsible Investment Association Australasia (RIAA) Australia 2021 conference, on May 7.

FS Sustainability is the media partner for the event.

Jane Ambachtsheer, global head of sustainability at BNP Paribas Asset Management spoke with FS Sustainability about the global fund manager's developing approach to managing biodiversity risk and opportunity.

BNP Paribas Asset Management is focusing on an indicator called the Corporate Biodiversity Footprint to assess the impact of its portfolios on biodiversity. This indicator relies on a metric expressed in square kilometers - mean species abundance (MSA), which measures what species were contained within a specific ecosystem prior to the disruption of human activity, and comparing it to the ecosystems' current health.

The indicator can help understand which environmental pressures, such as land use, climate change, nitrogen deposit and others are most contributing to the negative impact of a given company or of a given portfolio. Even if the direct causality is sometimes hard to estimate, Companies operating within ecosystems that have been degraded through the timespan in which the entity has operated, have a degree of responsibility as well as dependency on the ecosystem, Ambachtsheer said.

"One of the challenges with biodiversity is that it's super location specific," she says. "The benefit of mean species abundance is that it's one metric that you can apply to a sector. Through a data collaboration we have undertaken with a small number of managers and an external provider, we are in the process of using the Corporate Biodiversity Footprint for our portfolios against the MSCI World index to see the results, and that work will be ready by the end of the year."

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