Variation in sector- and company-level impacts
To quantify and compare company-level impacts, we used our global
ecosystem service and biodiversity maps to assess 585,569 physical
assets belonging to 2,173 companies in the MSCI ACWI index. In addition
to accounting for differences in impact due to asset locations, we also
accounted for differences in asset size by buffering asset locations by
the median asset size by activity type (see Methods/SI for more
details). This advances beyond the point locations (latitude/longitude)
that are common to most corporate asset databases and allows us to
account for the fact that, for example, between a mine and a cell tower
in the same location, the mine will have more impact due to its greater
footprint on the landscape. We evaluate companies’ total impacts for
each metric, as well as adjusted for total revenue. We omit nature
access as an ecosystem service metric in this analysis because it
primarily reflects how urban an asset is, which is not a relevant
measure of impact when considering existing assets from the wide variety
of sectors and companies evaluated here.
Companies in the utility, real estate, materials, and financial sectors
have the largest total impacts per company on average (Figure 2).
Utility companies tend to have high levels of impact across all
ecosystem service and biodiversity metrics, both per company and
relative to revenue. This is in part due to the large physical footprint
of utility companies. Companies in the financial and real estate sectors
have the highest impacts on coastal risk reduction. Their high
area-adjusted impact on coastal risk reduction indicates that their
assets tend to be in areas with high potential value for this service,
specifically in or near densely populated coastal areas.
The large range in variation in impact among companies within a sector
(Figure 2) points to the potential across sectors to identify companies
with relatively high or low levels of ecosystem services or biodiversity
impact. This allows decision makers to differentiate companies based on
their production or revenue efficiency with regards to ecosystem service
or biodiversity impacts. For example, someone looking to invest in a
particular sector could choose to invest in those companies with
relatively lower impact within that sector. Certain sectors and
industries may depend more directly on ecosystem services, such as
beverage companies within the consumer staples sector requiring reliable
sources of clean water, and companies within the materials sector
relying on timber for construction materials and paper products.
However, a company in any sector may have substantial ecosystem service
impacts. Therefore, these kinds of assessments should not be restricted
to certain sectors, especially as data and tools become more accessible.
Our approach can also provide more detailed resolution within a sector
at the industry level. For example, within the materials sector, one of
the highest-impact sectors, there is substantial variation among
industries on average but again high variation within industries (Figure
3). Metals and mining companies have the highest average impact, both in
absolute and revenue-adjusted terms, across all metrics except coastal
risk reduction. This is due to both the size and location of assets in
this industry. As the impact per km2 shows (Figure 3),
metals and mining company assets are located in areas with particularly
high values for red list species, overall species richness, and sediment
retention services. In contrast, companies in the chemicals and
containers and packaging industries have the lowest average impacts
(Figure 3). Companies in these industries have, on average, a smaller
footprint. Assets belonging to chemical companies tend to be in areas
with lower values for coastal risk reduction and sediment retention
impacts, as shown by the impact per km2 (Figure3).
Companies in both the chemicals and containers and packaging industries
tend not to have assets near Key Biodiversity Areas. Again, even within
a sector, our approach makes it possible to distinguish companies with
relatively low impacts, either within the sector overall or within an
industry. Taking these impacts into account during the investment
process can help mitigate risk or minimize impacts of investments.