Analysis using Impact Cubed’s new biodiversity dataset reveals that over 35% of MSCI ACWI, representing over $28 trillion market cap, has significant exposure to biodiversity, with $25 trillion of that from products and services that have a negative impact on biodiversity.
Contrary to common perception, Europe (STOXX600) may not be as environmentally friendly as investors often assume. When comparing the biodiversity impact relative to their respective market caps, Europe shows nearly twice the negative impact on biodiversity per unit of market cap compared to the USA (S&P500).
Designed in alignment with the findings of the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES) the dataset provides granular insights into over 2,300 business activities, from every listed company, and their impacts on four key drivers of biodiversity & SDGs; as well as key operational factors such as GHG, water and waste efficiency.
London, May 30 — Today, Impact Cubed proudly announces the launch of its biodiversity dataset. This innovative tool equips financial institutions with in-depth insights into the influence of business activities on four primary biodiversity drivers: land and sea use change, climate change, natural resource exploitation, and pollution; as well as SDG alignment and a collection of company operational factors such as carbon, waste and water efficiency and PAI flags.
Presented in an intuitive and accessible format, the biodiversity dataset is designed for immediate integration into investors’ existing workflows and systems. The factorised data structure ensures seamless compatibility, enabling them to leverage these insights without disrupting their current operations.
To bring the power of the dataset to life, Impact Cubed ran an initial analysis of four major indices’ market cap using the dataset, uncovering striking findings. A substantial 35% of the MSCI All Country World Index (ACWI), equating to over $28 trillion, is exposed to biodiversity; of which, an alarming $25 trillion is linked to products and services contributing negatively to biodiversity drivers.
This considerable exposure permeates both developed and emerging markets, with a staggering $19 trillion at risk in developed markets (MSCI World) and approximately $9 trillion in emerging markets (MSCI Emerging Markets). These figures underscore the extensive global scale of financial biodiversity risk.
“Robust data is the cornerstone of informed decision-making, driving sustainable practices and mitigating biodiversity risks,” stated Antti Savilaakso, Head of Research at Impact Cubed. “Our novel dataset provides the necessary insights to quickly and easily integrate biodiversity into the investment mainstream, whether it’s for establishing biodiversity funds, optimising existing portfolios, or creating an in-house biodiversity score.”
The analysis also dispels some prevalent misconceptions, such as the stereotype of ‘dirty Americans vs squeaky clean Europeans. In fact, STOXX600 has an overall biodiversity exposure of 46%, of which 43% is negatively aligned with biodiversity, vs S&P500 with 26% exposure and 21% negative alignment.
Additionally, emerging markets are slightly ahead when it comes to developing biodiversity solutions. The MSCI Emerging Markets Index has 10% exposure coming from positive biodiversity impacts, vs 8% from MSCI World.
To delve deeper into these findings, a fuller analysis can be found here.
The biodiversity dataset includes 2,300 products and services mapped to each biodiversity driver and SDG, as well as a collection of company operational factors such as carbon, waste and water efficiency and PAI flags.
To find out more about the biodiversity dataset, contact us at info@impactcubed.com.