{"id":207169,"date":"2024-05-28T09:45:00","date_gmt":"2024-05-28T13:45:00","guid":{"rendered":"https:\/\/ibkrcampus.com\/?p=207169"},"modified":"2024-05-29T02:36:25","modified_gmt":"2024-05-29T06:36:25","slug":"what-investors-need-to-know-about-biodiversity-reporting-standards","status":"publish","type":"post","link":"https:\/\/www.interactivebrokers.com\/campus\/traders-insight\/securities\/esg\/what-investors-need-to-know-about-biodiversity-reporting-standards\/","title":{"rendered":"What Investors Need to Know About Biodiversity Reporting Standards"},"content":{"rendered":"\n

By GIST Impact & TMX Datalinx<\/strong><\/p>\n\n\n\n

Since the launch of the Global Biodiversity Framework at the Kunming-Montreal conference in December 2022, we are seeing an international movement urging businesses to disclose the impact of their operations on biodiversity and nature loss, the dependencies they have on nature, and the risks posed to their business of those impacts and dependencies. According to KPMG, however, only 46% of the world\u2019s largest revenue-generating companies acknowledge the influence of biodiversity loss on their operations.<\/p>\n\n\n\n

Investors are uniquely positioned to influence biodiversity through their capital allocation to companies. The positive and negative effects of these investment decisions can and do shape the future of ecosystems and species across the planet.<\/p>\n\n\n\n

The scale of the challenge remains staggering. According to MSCI, only 2% of the estimated USD 3 trillion invested in sustainable funds globally is linked thematically to biodiversity, representing USD 60 billion held by 149 funds (as of September 2023). To make matters worse, in most of these cases, the methodology applied to link investment strategies to biodiversity remains a black box.<\/p>\n\n\n\n

In order to bridge the gap in nature-positive investment and bring transparency and rigor to the process, we need:<\/p>\n\n\n\n

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  1. A set of transparent, credible, and science-based standards that provide frameworks and guidance for investors to easily and confidently evaluate how their strategies align with biodiversity objectives.<\/li>\n\n\n\n
  2. Disclosure regulations that incorporate those standards systematically and in an interoperable way.<\/li>\n\n\n\n
  3. Datasets that use accurate data sources (whether that\u2019s company data or site-specific data) as a foundation and apply transparent methodologies based on peer-reviewed science, in alignment with the frameworks defined by standards and built into regulation.    <\/li>\n<\/ol>\n\n\n\n

    Organizations like TMX and GIST Impact now provide science-based and fully traceable biodiversity data to support investors in this transition. Such guidance is essential for investors to allocate funds in a way that mitigates risks and contributes positively to ecosystem preservation and species conservation.<\/p>\n\n\n\n

    In this article, we provide an overview of the latest updates related to the standards and associated frameworks that provide guidance to investors on biodiversity, as well as the key regulatory developments from around the world and implementation timelines to help investors navigate this complex landscape.<\/p>\n\n\n\n