“Biodiversity loss is the next major challenge barrelling down the path towards investors. Yet most have little or no idea how to mitigate the risks the crises represent for the companies in which they invest” Cardano told Environmental Finance, discussing the development of its biodiversity measurements. 

The Anglo-Dutch investor explained that the lack of granular data on biodiversity decline “has made it all but impossible to measure the risks involved”.

This was a “key driver” for Cardano to develop its bioacoustics study, a “pioneering” tool that offers real-time insights into the biodiversity levels of various geographical locations. This is used as a measure of the effectiveness of different ways of managing biodiversity impact. 

It also makes up part of the double materiality assessment that its portfolio companies are required to undertake to assess their impact on the environment.

Cardano said this real-time information helps it, as an investor, to assess whether its portfolio companies are on track to meeting their commitment to being nature-positive – as well as strengthening accountability of its portfolio’s impact on biodiversity. 

Cardano’s bioacoustics study is just one tool it uses to assess biodiversity impact. It is also used alongside a biodiversity indicator which translates the biodiversity and supply chain impact of individual companies into financial indicators, to help create a “more stable portfolio”. 

Dennis van der Putten, director of sustainability and strategy told Environmental Finance: “While there has been a growing clamour for ways to measure progress towards biodiversity goals, a major stumbling block has been the lack of reliable data on the ground”.

He added that it sees its role as “bridging the gap between investors and sustainability experts, drawing on a common language which, for investors, takes the form of numbers, data, and indicators that can then lead to concrete actions”.