ABSTRACT
The ongoing biodiversity decline is calling for a more comprehensive incorporation of nature-related risks into investment decisions. A water-polluting business depends on continuing access to water, exposing it to water scarcity issues. A biomass company depends on continued access to logging residues and will likely suffer from the impacts of deforestation. Although the interdependencies between natural resource-reliant companies and the health of the ecosystem are becoming increasingly obvious, indicators or measures of biodiversity, and especially biodiversity loss, have not been traditionally fully factored into financial reporting and analysis. Sustainability assessments seek to make responsible investment decisions easier by applying standardized methodologies to diverse ESG data available in the market, to come up with a more easily digestible score.
