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.