Biodiversity analytics for investment decision-makers

A startup has developed more than 135 metrics for assessing biodiversity risks, opportunities, and dependencies

Spotted: Around the world, biodiversity is being lost at an alarming rate, with the WWF reporting that world wildlife populations have declined by an average of 69 per cent since 1970. And this is not only an environmental catastrophe, but a potential economic crisis. The World Bank estimates that, by 2030, the loss of key eco-system services could cost the global economy $2.7 trillion (around €2.6 trillion) in GDP – each year. 

Financial institutions can play an important role in protecting the natural world through the capital allocation decisions they make. But, to do so, they need reliable and accurate data to inform their decision-making. This is the challenge that UK company NatureAlpha is tackling.    

The London-based startup provides investment decision-makers with location-specific insights into how their portfolios impact biodiversity through analysis that helps them understand their nature footprint, biodiversity risks, and natural capital impacts. This analysis combines geolocation data (satellite data paired with company location data) and reputation signals via news and intelligence-gathering. 

In total, NatureAlpha provides more than 135 metrics on risks and opportunities related to the natural world, and these insights are made available to financial institutions either through a user-friendly interface or an API. 

In January this year, NatureAlpha announced a partnership with the Integrated Biodiversity Assessment Tool (IBAT) – a joint initiative that brings together the United Nations Environment Programme, the International Union for Conservation of Nature, Conservation International, and BirdLife International. Under this partnership, IBAT’s biodiversity datasets – which are among the most authoritative in the world – will be integrated into NatureAlpha’s investor-facing metrics.  

This announcement was followed by the unveiling of a partnership between NatureAlpha and MSCI, under which MSCI will distribute the startup’s data on the companies making up the MSCI ACWI Index – a global equity index for large- and mid-cap stocks.

In the archive, Springwise has spotted other fintechs hoping to boost the protection of the natural world, including one that puts a financial value on biodiversity and another that turns rainforests into tangible ESG assets.

Written By: Matthew Hempstead