Biodiversity Scores for MSCI Index Companies Planned

Product builds on Dutch tool which can calculate portfolio footprint.

Developers are working on biodiversity scores for companies in the MSCI World Index, with a yet-to-be-confirmed launch date, according to a source.

Dutch consultants CREM and PRé Sustainability and Dutch ASN Bank are developing the scores based on the Biodiversity Footprint Financial Institutions (BFFI) tool, which they created previously.

The biodiversity company scores will be made available for all financial institutions with an appropriate Refinitiv licence.

The BFFI tool is one of six tools named in a recently released guide on biodiversity measurement approaches. The other five tools in the guide are Corporate Biodiversity Footprint (CBF), Species Threat Abatement and Restoration (STAR), Global Biodiversity Score for Financial Institutions (GBSFI), Biodiversity Impact Analytics (BIA) and Exploring Natural Capital Opportunities, Risks and Exposure (ENCORE).

The guide was created by the signatories of the Finance for Biodiversity Pledge, and the Finance@Biodiversity Community of the European Commission, a forum of dialogue between financial institutions to promote best practice.

In September last year, the Finance for Biodiversity Pledge was launched with 26 global financial institutions and has grown since then to 37 members, representing over €4.8 trillion. Among the signatories are ABN Amro, Axa Group, HSBC Global Asset Management and Dutch impact investment manager Triple Jump.

The guide provides in-depth information on the specific characteristics of the methodological approaches and guidance on how to select measurement approaches and metrics for both companies and financial institutions.

The BFFI methodology can be applied for calculating the biodiversity footprint of a portfolio, asset class, company or project.

It can also generate insights on the main drivers behind impact on biodiversity and support the development of an engagement policy. Another way of usage is to identify biodiversity impact hotspots at portfolio level and enable financial institutions to zoom in on a selection of loans and investments.

ASN Bank used the footprint results to assess and prove, for example, whether it was possible to reach a no-net-loss or net-gain on a portfolio level.

Signatories plan to provide annual updates of the guide to share new developments and insights on biodiversity measurement approaches.

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