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.