Biodiversity Is the New Carbon, But Can Finance Catch Up?

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In the evolving world of sustainable finance, there seems little doubt that the growing focus on biodiversity is reshaping how investors engage with ESG risks and opportunities.

For those working at the point where technology and data overlap, the challenge is not just scientific – it is structural.

At CeFPro's recent sustainable finance event, a speaker from a leading ESG technology firm outlined how financial institutions are beginning to translate complex biodiversity data into practical, decision-ready insights.

Working directly with asset managers, asset owners, and banks across Europe, the speaker highlighted a landscape marked by both ambition and realism. “Financial institutions are eager to act,” they noted, “but are often paralyzed by the enormity of the data challenge they face.”

Unlike climate-related metrics, biodiversity is multifaceted, spanning ecosystems, species, genetics, and interdependencies that resist simplification. As one panelist observed, “There is no single ‘biodiversity score’ that can capture it all – and nor should there be.”

At the heart of the discussion was the view that biodiversity must be approached progressively. Financial professionals do not need to become ecologists, but they must understand the materiality of nature-related risks and impacts. This requires collaboration with scientific experts, NGOs, and data providers to bridge the gap between ecological complexity and financial application.

One ESG platform provider shared how their technology enables institutions to aggregate ESG data from a variety of public and private sources. The aim, they said, “is not to simplify, but to create a multi-dimensional view of sustainability that allows users to drill into specific indicators.” For biodiversity, this includes data on water use, land impacts, pollution, and deforestation across sectors and portfolios.