In May, Qontigo’s index provider STOXX launched the ISS STOXX Biodiversity indices with ISS ESG. The suite of products enables investors to track companies that score highly in terms of the UN Sustainable Development Goals (SDGs) that relate to biodiversity and climate. The indices also highlight biodiversity leaders, that generate at least 25 percent of their revenues from activities making a positive net contribution to a selection of biodiversity or climate-related SDGs.
Antonio Celeste, STOXX’s director for sustainable product management, and Hernando Cortina, ISS ESG’s head of index strategy, talk us through the complexities of collecting biodiversity data and explain how investors can use it.
Why have you partnered to develop indices focused on biodiversity?


Antonio Celeste: There is momentum and clear demand. The investor community realises that biodiversity is as important as climate, and the two are related. The World Wildlife Fund’s Living Planet Report 2022 reveals that global wildlife populations have dropped by an average of 69 percent over the past 50 years. Asset managers and owners require solutions that address this.
The indices provide a starting point for dialogue, not a destination. They are a tool that investors can use to engage with companies on biodiversity, encourage them to disclose more relevant data, and perhaps even alter their business models to address biodiversity-related risks and opportunities.


Hernando Cortina: Biodiversity might seem like a new topic, but it really isn’t. What is new is linking it to corporate performance. That has been the missing data piece. But we can now assess businesses through a biodiversity lens. We can expand on the Principal Adverse Impact requirement from the EU Sustainable Finance Disclosure Regulation (SFDR) to report any negative biodiversity impact and provide a scale that quantifies that impact.
Collaboration between ISS and STOXX isn’t new either. We’ve launched several climate-related indices over the past five years. STOXX brings the index construction expertise, and we bring the ESG data. For investors, biodiversity could become as significant as climate, driven by several developments, including the EU Taxonomy and SFDR, the Global Biodiversity Framework, and national initiatives, like France’s Article 29 and its climate-related obligations.
How are investors using biodiversity-related tools?
AC: Some investors require solutions specifically designed around biodiversity. Others want to embed some components of our biodiversity framework into their existing products, such as our Paris-Aligned Benchmark (PAB) or Climate Transition Benchmark (CTB), to reduce their biodiversity footprint.
Investors in countries like France, the Nordic countries and the Netherlands have led the way, but now interest in biodiversity is becoming widespread. We see clear interest coming from Southern Europe as well – we’re in discussions with two major Italian firms. Momentum is picking up and biodiversity is quickly joining climate as a key concern.
Biodiversity data is location-specific. How do you collect it?
HC: Conceptually, the topic spans from fungi to blue whales, and everything in between. It’s a very dynamic field but still several years behind climate, and relies almost entirely on models. Neither of our two key indicators – mean species abundance (MSA) and potentially disappeared fraction of species (PDF) – are widely reported by companies. In their absence, we’re looking for indicators that enable us to piece performance together.
Keeping our coverage broad, to model biodiversity impacts we use several databases and sources included within ISS’s Biodiversity Impact Assessment Tool, such as revenue by activity and region, supply-chain linkages, lifecycle and lifecycle impact assessments. When available, to enhance the modelled data we include what we call ‘refined scores’, drawn from disclosed company data. This might be where a business sits on the Forest 500 ranking, for instance.
How do you ensure data you collect is consistent, reliable and accurate?
HC: We’re providing data due to market demand. Like all estimated data, it’s not perfect. Ideally, companies would disclose PDF and MSA data. That will improve with time, as frameworks such as the Taskforce on Nature-Related Financial Disclosures (TNFD) are adopted. We expect that to happen over the next 12-24 months, just like it did with climate, following the Taskforce on Climate-Related Financial Disclosures.
We carefully select the databases we use, and conduct quality checks to ensure consistency across company types and size. Looking forward, we’d like to see companies attach standardised latitude and longitude information to their assets, which would help us refine the data and fill gaps. It’s something that we’re collecting ourselves, but it’s a work in progress.
How do you capture supply-chain data?
HC: Biodiversity is analogous with Scope 3 emissions data, except biodiversity is more complex because of the geographic element. We use input-output models – if business A is making product X, then its supply chain typically includes products B, C, and D – and apply averages to quantify impact. If the business discloses supply-chain information, such as lifecycle data, we can go further and refine the data.
How is the data used to construct the indices?
AC: First, we exclude companies whose activities harm biodiversity, like pesticide manufacturers or those that use animal testing. Second, while it’s impossible to have zero biodiversity footprint, we select companies with the least impact by benchmarking their PDF and MSA measurements. There are differences among sectors. Some sectors such as food and beverage or utilities have a greater impact on biodiversity.
Third, using the UN SDGs framework and ISS research, we look at businesses that sell products and services that have a positive biodiversity impact.
Finally, biodiversity and climate are related – we need to decarbonise the economy to reduce biodiversity loss – so we add an additional layer that seeks to reduce the portfolio’s carbon footprint by 30 percent. From this starting point, we can raise that level of decarbonisation and eventually align the index with PAB/CTB emissions trajectories.
How will the quality of biodiversity-related data evolve?
AC: There’s a huge gap in terms of what is needed and what we have. With the introduction of the EU’s Corporate Sustainability Reporting Directive, from 2025 we’ll start to get more data from the largest corporates. In the meantime, the TNFD framework will provide guidance on how to disclose portfolio companies’ exposure to biodiversity risk and opportunities.
But to stop biodiversity loss, we can’t simply rely on disclosure. Companies need to act. Not having the data is not an excuse. Clients are already asking for forward-looking data, to see how a company will be positioned in three to five years and consider their risks but also opportunities. I see them becoming more vocal, using products like ours and others to take ownership of the topic and to start a dialogue with companies. This next step of engagement will really move the needle, and we cannot wait.