Thesis driven
Sofia Bennis

Biodiversity Data: Closing the Information Gap

Our latest research delves into the biodiversity data landscape, revealing key use cases and potential opportunities for investors.

In the ever-evolving landscape of environmental, social, and governance (ESG) considerations, biodiversity data stands as a relatively minuscule yet burgeoning market. Recent global events have propelled biodiversity into the spotlight, with COP15 in December 2022, held in Montreal, playing a pivotal role in elevating biodiversity to the forefront of the global regulatory agenda.

It is crucial to acknowledge the corporate regulatory landscape right from the outset.  The Taskforce for Nature-related Disclosures (TNFD) made its debut on September 18, 2023, promising to revolutionize the biodiversity data landscape. Notably, the launch of TNFD aligns with the anticipated prominence of nature at COP28, showcasing a steadfast commitment to addressing this emergent systemic risk. The Corporate Sustainability Reporting Directive (CSRD), scheduled to be implemented gradually starting from January 1, 2024, is set to succeed the Non-Financial Reporting Directive (NFRD). The NFRD had already mandated companies to disclose their ESG performance alongside their financial statements. Initially, the CSRD will apply to companies with over 500 employees, a revenue exceeding €40 million, and/or a total balance sheet exceeding €20 million. This regulatory shift underscores the growing significance of biodiversity reporting for businesses.


Data Challenges and Promise

Numerous initiatives are currently emerging to protect, restore, enhance, or manage biodiversity, spanning various aspects:

  • Project development: rrreefs, xylo systems, Leeana, verna
  • Project risk assessment: Kanop, Risilience,  Cervest
  • Reporting: Sabbio, Nala Earth, natcap
  • Offsetting: Single.Earth, Arbonics, creditnature, Understory, goodcarbon 
  • Investing: The Landing Group, Handprint, Cultivo, Xilva

However, we think that any endeavor related to biodiversity, whether it’s investing, reporting, or conservation, heavily relies on comprehensive and accurate biodiversity data collection. This underpins any meaningful progress in this field. 

The path to biodiversity enlightenment is fraught with challenges. Biodiversity data encounters issues related to accessibility, timeliness, and comparability. Often, data is elusive, hidden behind paywalls or outdated, owing to its origin in peer-reviewed scientific sources, rendering it two to four years old by the time of publication. The absence of data standards further complicates the matter, undermining comparability, a cornerstone of data’s utility to investors.

In response to these challenges, there is a pressing need for a data- and technology-driven approach to facilitate the scaling of biodiversity conservation efforts. While biodiversity data has traditionally been sourced from NGOs and large ESG data providers, newer and more specialized players are now entering the arena. Data is derived from a diverse range of technologies, each at varying levels of maturity and scalability:

  • Satellite technology: Satlligence, Overstory
  • Environmental DNA: Nature Metrics, Basecamp Research, SimpexDNA
  • Drones, acoustic and image sensors: Pivotal, foldAI, Gentian
  • Combination of desk research with open-source information: NatureAlpha, Iceberg Datalab

Unlike carbon removal, where more is unequivocally better, biodiversity’s impact is non-linear. An excess of biodiversity can be as problematic as a deficiency, underscoring the intricacies of maintaining a delicate ecological balance.


The Symbiotic Relationship: Biodiversity and Climate

Biodiversity and climate crises are intrinsically intertwined. Natural habitats, both terrestrial and marine, play a pivotal role in absorbing carbon, making biodiversity preservation essential to combating climate change. Yet, the reverse is equally true; climate change represents one of the major drivers of biodiversity loss, alongside land-use change, direct exploitation, invasive species, and pollution. This interconnectedness underscores the urgency of addressing both issues in tandem.

Startups primarily oriented towards carbon, which we have chosen not to feature in this mapping, are also actively engaged in biodiversity initiatives.


Upsides and Downsides: The Road Ahead

Biodiversity holds the promise of becoming the “next carbon” for data disclosure. Initiatives like the Corporate Sustainability Reporting Directive (CSRD) will soon require large and listed companies to report on their biodiversity impacts and risks. The diversity of underlying technologies, from satellite-based monitoring to environmental DNA sampling, offers scalable solutions to the information deficit.

Nevertheless, challenges abound. The intricacy of biodiversity monitoring and assessment calls for accurate methodologies and standardized metrics, a task that may require considerable time. The early market could witness an influx of low-quality biodiversity actions, akin to the pitfalls seen in carbon markets. Companies’ commitment to addressing biodiversity remains low, with many still underappreciating its significance. Additionally, uncertainty prevails regarding which underlying technology will ultimately emerge as the dominant solution.

Who else is out there?

We are enthusiastic about the developments in this field and are continuously seeking to expand our knowledge. Please don’t hesitate to contact us if you think your company aligns with our interests or if you’d like to explore potential collaborations. You can reach us by completing this form.

Kindly note that the perspectives shared in this article represent the author’s views and do not necessarily reflect those of XAnge.

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