FOSDA Biodiversity Working Group (BWG)
Roundtable on Addressing Ecological and Economic Risks
Executive Summary
As capital markets, business, and finance evolve, the focus on natural capital will intensify. Intermediaries, businesses, and service providers play a crucial role in connecting market participants with the intelligence they need. A deeper understanding of ecological tipping point risks across regions is essential. There is potential for a Nature Public Facility (NPF) to curate the necessary data. FOSDA’s Biodiversity Working Group is ready to contribute to this initiative.
Introduction
On October 2nd, FOSDA members convened with leaders from standards, monitoring, academic, and earth observation organizations to discuss the future of nature and biodiversity data and analytics. The dinner roundtable, hosted by FOSDA, TNFD, and Innovate UK, took place at the London National Gallery of Art, just before the ‘Ecological Risk and Commercial Risk’ event at the London Royal Society.
The discussion centered on three questions:
- What is the Nature Public Facility (NPF) Concept, and how does it connect with market participants’ practical needs to drive nature-positive actions?
- What is the value and relevance of Earth Observation in this context?
- What are the perspectives of FOSDA members on the link between ecological and commercial risks, and the adequacy of current nature intelligence?
Participants
- Chris Perceval, S&P Global (Chair, FOSDA Biodiversity Working Group)
- Hortense Bioy, Morningstar
- Alice Borgonovo, ClarityAI
- Tom Maddox, CDP
- Christian O’Dwyer, Bloomberg
- Cecily Liu, LSEG
- Ashleigh Lee, City of London Corporation
- Sushma Shankar, Deep Planet
- Christophe Christiaen, Oxford Sustainable Finance Group
- Andy Bennett, Innovate UK Business Connect
- Giles D’Souza, Planet
- James D’Ath, TNFD
- Cathrine Amour, TNFD
- Nick Wells, UK Centre for Ecology and Hydrology
- Gareth Thomas, Natural History Museum
- Emma O’Donnell, University of Oxford
Section 1: Nature Public Utility Concept and Market Needs
The Taskforce on Nature Related Financial Disclosures (TNFD) is leading the design of a Nature Public Facility. A paper outlining the initial concept will be released at COP16 in Colombia, detailing the timeline, development process, principles, and objectives. The NPF aims to align with TNFD’s efforts to enhance transparency through standardized measurement and disclosure. One participant summarized the Public Utility’s purpose as generating ‘Nature Intelligence for the boardroom.’ Like the Net Zero Data Public Utility, this initiative has the potential to positively impact the marketplace by providing efficiency, quality insights, and harmonization. Its success will rely on consistent models, high-quality metadata, clear standards, shared definitions, and appropriate licensing rules. The system will curate datasets with location-specific detail and incentivize timely updates from data sources. Artificial Intelligence may also enhance dataset visibility and integrate sector-specific layers.
Section 2: Value of Earth Observation
The Earth Observation and Spatial Data community offers valuable insights. Satellites (commercial and government) capture high-resolution images, providing consistent, objective, and near-real-time global information. This data is globally available, reliable, and comparable over time and location. Satellite data can measure various Earth features, aiding in the development of indicators for environmental health, land use, deforestation rates, and more. Key considerations include ensuring the right quantity and quality of data, aggregating inputs, and utilizing AI for data processing.
Section 3: Connecting Ecological and Commercial Risks
A coalition of central banks, the Network for Greening the Financial System (NGFS), has developed a ‘macro-criticality framework for climate and nature.’ Climate scenarios impact nature differently, with consequences that can compound economic impacts, particularly through global supply chains. These impacts can manifest as acute shocks or chronic changes. Sophisticated modeling demonstrates that ‘tail events’ can occur, raising questions about potential tipping points and the integration of economically nested data into market analyses.
Conclusion
Concluding remarks highlighted:
- A current opportunity to shape the Nature Data Public Facility’s design to ensure it addresses the right questions and provides curated data.
- The importance of reflecting end-user interests and an evolving understanding of systemic risk.
- FOSDA members can leverage this utility to help market participants identify opportunities, understand risks, and develop effective transition plans.
This collaborative community around nature, data, analytics, financing, and business decision-making can foster ‘system resilience’ while promoting ‘greening finance’ and ‘financing green.’