Tackling Biodiversity Risk – A biodiversity risk assessment guide for companies and financial institutions

On January 16, 2023, WWF has launched its WWF Risk Filter Suite at the World Economic Forum – incl. the brand-new Biodiversity Risk Filter – a free online tool enabling companies and financial institutions to analyse their biodiversity risks.

The Biodiversity Risk Filter is accompanied by two reports to which we contributed to:

📃 The main WWF and Climate & Company report Tackling Biodiversity Risk – A biodiversity risk assessment guide for companies and financial institutions

The report summarises the underlying methodology briefly and provides recommendations to companies, financial institutions, policy makers, data and tool providers as well as academia. It also contains a case study by Climate & Company which applies the methodology to a sub-sample of the MSCI All Country World Index to demonstrate its applicability to broad market portfolios.

📃 The Biodiversity Risk Filter Methodology Documentation incl. additional guidance for financial institutions

This report describes the underlying methodology in more detail and contains three additional guidelines developed by Climate & Company and WWF.

• Guidance A: Collecting location-specific proxy data on portfolio companies’ operational sites
• Guidance B: Collecting location-specific proxy data on supply chains
• Guidance C: Aggregating risks to the company and portfolio level

KEY FINDINGS

👉 The case study serves as an excellent proof of concept, demonstrating that in principle a nature-related risk assessment is possible, even for broad market portfolios.
👉 While there is still room for improvement regarding methodological alignment or data availability (which forthcoming disclosure regulations will tackle), entities can start assessing their biodiversity-related risks.
👉 There is increasing regulatory pressure, for example via the forthcoming European Sustainability Reporting Standards (targeting ~50k companies) or Target 15 of the Global Biodiversity Framework. Hence, entities will have to deal with the topic (by law), and this publication provides excellent support.