Value-transforming financial, carbon and biodiversity footprint accounting

Transformative changes in our production and consumption habits are needed to halt biodiversity loss. Organizations are the way we humans have organized our everyday life, and much of our negative environmental impacts, also called carbon and biodiversity footprints, are caused by organizations. We explore how the accounts of any organization can be exploited to develop an integrated carbon and biodiversity footprint account. As a metric we utilize spatially explicit potential global loss of species across all ecosystem types and argue that it can be understood as the biodiversity equivalent. Biodiversity equivalent is able to capture the fundamental understanding that the same human pressure in different regions of the world has a different potential to harm as well as conserve global biodiversity. The utility of the biodiversity equivalent for biodiversity could be like what carbon dioxide equivalent is for climate: it provides a common currency for measuring biodiversity loss across the planet. We present a global country specific dataset, BIOVALENT, that organizations, experts and researchers can use to assess consumption-based biodiversity footprints.

To highlight the utility of the method, we draw upon multiple case studies and present the biodiversity footprints of S Group (multi-sector retail corporation), city of Tampere and Finnish citizens. However, we also argue that the assessment of biodiversity footprints is not sufficient to drive transformative change. We provide a framework for a more robust financial value-transforming accounting model. To test how biodiversity footprinting could transform financial values, we explore how the biodiversity equivalent could be used for offsetting the global value chain biodiversity footprints. Here we use a Finnish university as a living lab. Assigning an offsetting cost to the biodiversity footprint significantly altered the financial value of the organization. We believe such value-transforming accounting is needed to draw the attention of senior executives and investors to the negative environmental impacts of their organizations.