Market adaptation of biodiversity measurement- where is it standing, where is it going?

Due to its significance for the environment and its ecosystems, preventing biodiversity loss has become a pressing issue. Rising public awareness leads financial institutions and investors to increasingly consider biodiversity in their investments, either by measuring biodiversity risks or investing in organizations and projects that aim at conserving or restoring biodiversity.

However, enabling investors to pursue such strategies and to measure their contribution requires efficient and reliable measurement frameworks. Financial institutions and investors face a large variety of different approaches on the market, which vary significantly in their measurement scope and objective. Therefore, careful selection of the measurement approach and the corresponding data is required.

The goal of the present paper is to provide an in-depth analysis of the current landscape of biodiversity measurement frameworks and metrics and thereby support corporations, investors and other stakeholders in selecting suitable methods for their purpose. As a first step, a theoretical framework is presented that clusters and categorizes the variety of different measurement approaches. Input-output-outcome-impact (IOOI) models, commonly used in the field of impact measurement, are applied to illustrate causal relationships how organizations can contribute to protect or restore biodiversity. Based on such models, different categories of metrics are defined and characterized. Secondly, the currently available biodiversity measures in theory and practice are mapped against this framework to illustrate the status quo of the market. In the third and final step, the paper aims at identifying trends and developments within the biodiversity measurement field, to indicate the direction in which the field is developing.

Through this analysis, the present paper offers a comprehensive review of the current landscape of corporate biodiversity measurement in the financial market. This can help investors, policy makers and researchers to better understand how biodiversity impact can be measured, and, thus, support them in quantifying and communicating their efforts to protect biodiversity.