Introduction
Global acceleration of economic activity has raised many people’s
standard of living but is also disrupting the climate system, driving
loss of biodiversity, and undermining Earth’s life support
systems1. These losses put global sustainable
development goals, and the long-term societal prosperity that they
underpin, at risk, as well as endanger key environmental agreements such
as the Paris Climate Accords2 and Kunming-Montreal
Global Biodiversity Framework3. Consumers, investors,
and regulatory bodies are increasingly calling for greater transparency
around corporations’ nature-related impacts to facilitate decisions that
are in line with sustainable economic growth and development4,5. Meaningful change requires accessible,
science-based information on corporate impacts to and dependencies on
nature.
Demand for quantitative information on nature-related risks and
opportunities is growing, driving important advances in measuring and
reporting on companies’ impacts and dependencies on nature. Efforts such
as the Task Force on Nature-Related Financial Disclosures and the
Science-Based Targets Network are advancing frameworks and guidance for
tracking and reporting on nature-related impacts and
dependencies6,7. Advances in methodologies, data, and
tools for measuring impacts to nature are making quantitative reporting
increasingly possible8–10.
ESG (environmental, social, governance) approaches aim to evaluate
companies on a range of sustainability- and ethics-related issues. To
date, the focus of the environmental pillar of ESG has centered on
greenhouse gas emissions, air pollution, water and waste management,
and, more recently, impacts to biodiversity11,12.
Existing approaches largely do not account for the ways corporate
activities impact or rely on ecosystem services. Ecosystem services are
the conditions or processes of ecosystems that help to generate benefits
to people13 including protection from natural hazards
such as coastal flooding, water purification for clean water for
drinking and recreation, and mental health benefits from enjoyment of
nature. A broader representation of the multiple facets of corporate
impacts on nature and its contributions to human well-being is critical
to effectively managing nature-related risks and opportunities and to
weighing tradeoffs between the benefits of economic activity and the
potential harms to people and economies from the loss of nature.
Here, we leverage recent advances in high-resolution, global ecosystem
service modeling14,15 and the growing accessibility of
high-resolution satellite imagery to develop a new, open-source approach
for quantifying the direct impacts of physical assets on ecosystem
services and biodiversity. Our approach scales from the level of
individual assets to collections of assets, such as corporations or
portfolios, using open-source, process-based ecosystem service
models14–16. It overcomes limitations identified in
existing solutions for accounting for companies’ environmental impacts,
including limited transparency in underlying models and
metrics17, limited ability to differentiate impacts
within sectors18, or reliance on regionalized values
with low spatial resolution18–20.
We demonstrate how our approach provides new, decision-relevant insights
into corporate impacts on nature in two ways: First, we apply this
asset-based approach to a diverse set of global companies across all
sectors. Specifically, we evaluate the ecosystem services and
biodiversity impacts of over 2,000 companies included in the MSCI ACWI
index21 – an equity index that spans large- and
mid-cap companies from developed and emerging market countries – based
on over 580,000 mapped physical assets22 across all
continents except Antarctica. Second, we use high-resolution satellite
imagery to conduct a more detailed analysis of specific assets and show
the added granularity and context that can be gained with asset-specific
footprints. We focus on a set of active lithium mines with historical
production data22 because of the increasing demand for
lithium in an energy transition23,24, the physical
nature of mining, and its environmental
impacts15,25,26. We show how our approach can be used
to differentiate impacts among assets of similar activity types (e.g.,
among different mines), and to track impacts over time.