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ASN Bank has convened a group of fellow Dutch financial institutions – including ACTIAM, FMO, Robeco and Triodos Bank – to develop a common accounting measure for the positive biodiversity impacts of their investments.
The Partnership Biodiversity Accounting Financials (PBAF) initiative was unveiled this week and mirrors the successful carbon accounting initiative (PCAF) that ASN Bank set up in 2015.
Biodiversity is an issue ASN Bank, which is part of the De Volksbank group, has been focusing on for a number of years: In 2016, it included biodiversity as one of its three sustainability pillars – joining climate change and human rights – and committed to having a net positive biodiversity impact by 2030.
But Roel Nozeman, Senior Advisor Biodiversity at ASN Bank, told RI that every company it has assessed to date has a “net negative impact on biodiversity”, highlighting the challenge the 2030 pledge poses.
The initiative is important therefore, he said, in answering questions on how financial institutions can begin to “compensate” for such impacts.
“We need to invest in nature based compensation”, Nozeman said. “That is why the initiative has come into being. We need answers to important questions about how we compensate, what positive impact is, and what is the reference point from which we measure this”.
"We can’t wait for perfect data, there is a crisis going on" – Roel Nozeman, ASN Bank
PBAF will spend the next couple of months working on a common approach to measuring positive impact on biodiversity, aiming to publish its findings in May – a timeframe that Nozeman admits is “quite ambitious”.
ASN Bank has measured its own biodiversity footprint every year since it undertook a pilot in 2016 with consultants PRé Sustainability and CREM.
From this year, Nozeman told RI, the bank will start to calculate the biodiversity footprint of companies before an investment is made.
“We haven’t set an exact boundary, but the footprint gives us an insight into which companies have the largest impact”, he said.
The bank’s biodiversity footprint relies on data from sources such as the Exiobase, the open source database funded by EU grant money.
This raw data – which goes down to sector level – is translated by ASN Bank into an indicator of the biodiversity loss it is responsible for.
There isn’t company-level data yet for biodiversity, Nozeman told RI, but the footprint provides an overview of “the hotspots of where the biggest risk of biodiversity loss is in your portfolio and points to which sectors you should do more research”.
“We know, for example, that if a sector emits a certain amount of CO2, that will lead to a certain amount of diversity loss and the same can be done with things like pollution entering into waterways.”
Despite the lack of company-level data – stemming from both a lack of corporate disclosure, and provision by data providers – Nozeman said that “we can’t wait for perfect data, there is a crisis going on”.
In January, a report by PwC and WWF on biodiversity, which referred to the issue as the “next frontier in financial risk management”, described ASN Bank as “leading the way” on sustainability.
And last month, RI reported that four French asset managers are seeking a data provider to help quantify the impact of a company’s activity on biodiversity. They are AXA Investment Managers, BNP Paribas Asset Management, Mirova and Sycomore Asset Management.
Nozeman told RI that there has been interest in PBAF from other finance institutions, both within and beyond the Netherlands, but said that the initiative will not be opened up until after it publishes its methodology in the spring.
ASN Bank is also involved in the Dutch central bank’s own working group on biodiversity, leading an globally-focused workstream looking at tools and reporting on deforestation.
The five other members of the PBAF initiative are investment managers ACTIAM and Robeco, Triodos Bank, development bank FMO and impact specialist Triple Jump.