News | Dec 2022
Sebastian Bekker, Senior Programme Officer in UNEP-WCMC's Nature Economy team, looks at how the ENCORE biodiversity module, a tool created in partnership with UNEP-FI and Global Canopy, can help assess risks in the mining sector.
In order to achieve our ambitious global biodiversity goals as outlined at the UN biodiversity summit, COP15, over the past few weeks, we need widespread and concerted efforts to achieve positive outcomes for biodiversity.
The mining sector could potentially be a leader in this respect. Good sectoral standards and guidelines already exist on how to manage biodiversity (and ecosystem services). However many of these may be new to finance sector actors who are seeking to identify and manage the biodiversity risks created by their investments in the mining sector. The loss of biodiversity, and society’s response to it, creates material risks and opportunities for banks, asset owners, asset managers and insurers.
The ENCORE biodiversity module can help to build the bridge between financial institutions and mining companies. By providing an initial screening at the portfolio level, it gives financial institutions the basis for initial biodiversity-focused engagement discussions with companies.
When developing the ENCORE biodiversity module, it was relatively easy to develop a method for mining, as asset level data is available. By asset level data, we mean data on the locations of physical structures or land owned and/or operated by companies.
Asset-level data for the mining sector tends to refer to the locations of specific mines as well as who owns/operates them. Such datasets are often developed and curated by environmental, social and governance (ESG) service providers. However, companies themselves will sometimes also have their own datasets denoting the locations of their mines.
The biodiversity module aims to help financial institutions work towards answering the following questions related to biodiversity impacts in their mining portfolio:
Broadly, biodiversity performance of a mining portfolio and alignment with global biodiversity goals is determined through exploring a portfolio’s impact on ecological integrity and its potential to reduce species’ extinction risk.
BNP Paribas Asset Management started using the ENCORE biodiversity module to explore to what extent their financial portfolio indirectly drives species extinction risk and impacts ecological integrity for the mining sector.
This high-level assessment is a first step toward a better integration of biodiversity loss risks in our investment decision process, and on-going discussions to enable access to asset-level information should also provide a unique opportunity to engage with companiesJulien Bouyssou, ESG analyst, BNP Paribas Asset Management