S&P is adding a dataset on public companies to assess risk in an area that has received significantly less attention than climate change: biodiversity.
The firm announced Wednesday that it has included “a number of new nature-related risk metrics including a dependency score and ecosystem footprint measure enabling greater understanding of a company or asset's dependency and impact on nature.” Those data cover more than 17,000 companies and 1.6 million assets, according to the announcement.
The newly available data rely on a methodology that S&P and the UN Environment Programme launched together in January, called Nature Risk Profile.
An early finding S&P made using the dataset is that 85% of the largest companies globally “have a significant dependency on nature across their direct operations,” the firm stated.
"From the launch of the Taskforce on Nature Related Financial Disclosures in 2021 to the significant commitments made at COP15, there is an increasing demand from companies and investors to be able to quantify both their dependency on nature and the impact of their operations on location-specific ecosystems,” Thomas Yagel, chief operating and product officer at S&P Global Sustainable, said in the announcement.
The dependency score within the dataset looks at a company’s reliance across 21 ecosystem services and the risks those ecosystems face. The ecosystem footprint considers a company’s impact on nature and biodiversity, including land use, the effect on an ecosystem and how locally significant that ecosystem is, according to S&P.
Nearly half (46%) of the largest companies globally have “at least one key asset” that is located within key biodiversity areas, and those assets “could be exposed to future reputational and regulatory risks,” the firm stated.
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