PBAF releases new standard to measure financial sector’s impact on biodiversity - Global Balance

The Partnership for Biodiversity Accounting Financials (PBAF) has published its new standard for financial institutions to measure the impact of loans and investments on biodiversity.

Dubbed the PBAF Standard 2022, this update is focused on impact assessment and offers three separate publications: a Q&A on impact assessment; an overview of impact assessment approaches and assessment of positive impact; and guidance, requirements and recommendations on biodiversity footprinting. These three PBAF documents build on the group’s first report from 2020, which focused on how a quantified biodiversity impact assessment or biodiversity footprint should be conducted.

PBAF, established in 2019, aims to contribute to a harmonised approach to assessing and measuring biodiversity impact by the financial sector through knowledge exchange and the development of the ‘PBAF Standard’.

The PBAF Standard 2022 distinguishes five types of impact assessment:

• Screening of a potential impact on biodiversity, based on (a) qualitative information on impact drivers; (b) asset location and geospatial biodiversity data; (c) information on impact drivers and geospatial biodiversity data; and/or (d) a quantified biodiversity footprint; and

• Measuring actual impact on biodiversity, based on monitoring of actual changes in biodiversity and an attribution of these changes to interventions/actions financed.

The standard is also harmonised as far as possible with other initiatives in the financial sector, such as the Taskforce for Nature-related Financial Disclosures (TNFD), the Science Based Targets Network (SBTN), and the EU Align project, which Annelisa has also worked on.

Roel Nozeman, senior adviser on biodiversity at ASN Bank and PBAF programme director, said: “The [financial] sector has a crucial role to play in reducing damage to biodiversity and in guiding the sustainable use, protection and restoration of nature. Being able to measure our impact on biodiversity is an important prerequisite for fulfilling this role. The report we are presenting today gives banks, asset managers and pension funds the insights they need to get started on this right away.”

Looking ahead, the next version of the PBAF Standard (v2023) is due to be expanded to include an assessment of dependencies. Discussions around the topic have already taken place within the working groups.

Annelisa Grigg, Board member of PBAF commented that ‘The PBAF standards offer a great resource for financial institutions wishing to understand and start to address the impacts of their investments on biodiversity.”