Is biodiversity the new carbon?

Lately, I've seen this idea popping up everywhere:

climate = carbon

nature = biodiversity

??

I've seen events about "Climate and Nature", as if Climate was not part of Nature. Recently, an impact investor even asked me: "What do you think of the potential of Biodiversity ESG platforms for corporates?"

This question left me puzzled.

I understand the corporate need of creating simple frameworks, but it becomes problematic when it:

• promotes measurement at the expense of action,
• focuses on compliance instead of strategy and value capture,
• solves a problem but may create a bigger one,
• looks at the problem in silo instead of recognizing interdependencies,
• conveys an unscientific worldview misrepresenting what Nature is.

It also questions what impact investing really is, and the role of impact investors.

These new conversations on Nature and Biodiversity are overall positive and useful, as it helps shifting away from the carbon tunnel vision.

It’s great to see some excitement (and action?) around Nature and Biodiversity. In the EU, this is driven by new EU regulation, namely CSRD, and the recent EU Nature Restoration Law (part of the COP15 Agreement on Biodiversity).

Under the CSRD, companies are required to report on how their business activities impact a range of environmental topics, including climate change, water resources, pollution, and importantly, biodiversity and ecosystems.?

This means companies will need to disclose their impacts on biodiversity, as well as their efforts to reduce biodiversity loss and restore ecosystems.?

At Handprint, we have been advocating for years for this type of shift towards nature-centric approaches of corporate sustainability.

My co-founders Dr. Simon JD Schillebeeckx and Ryan Merrill PhD have compiled the shifts we are calling for in our Manifesto “Regeneration First”, available here:

?? https://handprint.tech/regeneration-first/

Despite more focus given to nature, it looks like the startup world is going to repeat the mistakes we’ve seen happening in the carbon space.

The problem with "Measure first, act later" type of framework

We often hear the phrase, “We cannot manage what we don’t measure,” and while this has some truth, it risks promoting inertia.?

Too much focus on measurement can delay urgently needed actions, especially when “measurement” is presented as a first step. For example, biodiversity is incredibly complex, spanning genes, species, and ecosystems, and cannot be reduced to a single metric like carbon is with CO? equivalents. Efforts to develop indicators that simplify biodiversity, such as "species richness" or "habitat quality," risk oversimplifying what’s needed for effective action, focusing on measuring biodiversity first may lead companies to believe that data collection and reporting are enough, when in fact, the urgent need is for actions that protect ecosystems now.?

Just read this short note about the existential risk we face due to insect loss: https://www.researchgate.net/publication/364821580_Climate_Disruption_Caused_by_a_Decline_in_Marine_Biodiversity_and_Pollution

Delaying action until perfect measurements are available would be catastrophic, as many ecosystems are rapidly degrading, or even collapsing, as we speak.

Because of the way mainstream corporate sustainability frameworks define corporate responsibility, a lot of confusion exists between calculating an environmental footprint and setting a target.

It happened in the carbon space, where all we could hear from corporates was “Measure, Reduce, Offset”. The risk is that Biodiversity ESG platforms perpetuate these legacy frameworks that limit AND delay action.

Comply! instead of strategically capture value

Many ESG platforms are designed to ensure companies comply with regulations, which is a necessary but insufficient approach. The challenge with a compliance-first strategy is that it treats sustainability as a box-checking exercise, without aligning it with the company's broader strategic goals.

For example, biodiversity offers immense opportunities for companies willing to invest in restoring ecosystems, creating regenerative business models, and engaging in circular economy practices. Ecosystem services—such as pollination, water purification, and carbon sequestration—offer real value to companies that depend on natural resources. When companies adopt a compliance mentality, they often unknowingly put on blindfolds such that corporations miss out on real value-capture opportunities.

Solve a problem while creating a bigger problem

ESG platforms that focus solely on biodiversity may be trying to solve a non-existent problem. Biodiversity loss, while urgent, isn't something that can be solved by simply measuring it or by ticking a box on a compliance form. The problem lies in the fundamental relationship between the economy and nature.

Companies don’t need to “solve” biodiversity loss in isolation. Instead, they need to rethink their relationship with the natural world, moving from extractive practices to regenerative ones. Solving biodiversity loss requires systemic change. Treating biodiversity loss as just another checkbox on the ESG list doesn't address the root cause. The real value is not in creating another silo (a biodiversity ESG platform). It is in working on integrated biodiversity action, but aligning a company’s business model with planetary boundaries.

Even with a bias for action, addressing the sustainability question in silos is problematic

Sustainability silos are dangerous blindfolds. The biggest issue with siloed thinking in sustainability is the failure to account for the interconnectedness of natural systems. When companies address biodiversity, climate, or water independently, they miss the cascading effects these systems have on each other.

For instance, a company focused on reducing its carbon footprint might switch to monoculture plantations for carbon offsets. While this may seem like a climate-positive move, it can degrade ecosystems, reduce species diversity, and disrupt local water cycles. Monocultures are particularly problematic for biodiversity, leading to habitat loss, soil depletion, and increased vulnerability to pests .

Similarly, a company prioritising biodiversity might undertake reforestation projects, but without considering water use. Overplanting trees in water-scarce regions, or planting non-native species, can harm ecosystems and deplete water resources. Such unintended consequences show that siloed actions in sustainability are often counterproductive.

Conveys an unscientific representation of what “Nature” is

Climate refers to long-term patterns of temperature, humidity, wind and precipitation, governed by the Earth's atmosphere, hydrosphere, lithosphere, and biosphere.

These systems are integral components of the broader ecological system we call Nature, which encompasses the physical environment, living organisms, and the interactions between them. And of course humans are a key part of nature too (the anthroposphere).

Climate can thus be seen as a regulator of natural systems, shaping ecosystems while being shaped by them. Human activities that degrade Nature, through deforestation, overexploitation of resources, pollution, jeopardize the ability of nature to regulate the climate.?

We need to recognize that people are a part of nature. We cannot think about the economy, the natural world, and society as separate systems. The economy and society only exist within the natural environment. It is times our economic models reflect this reality.

The role of impact investors

Impact investors play a crucial role in driving corporate sustainability. Their capital should create systemic change, not just compliance with standards. ESG platforms can be valuable when they help companies align their business models with planetary boundaries. However, ESG platforms today are focused more on regulatory compliance than on meaningful ecological outcomes.

Never forget, companies like Coca Cola (plastic & obesity), Exxon Mobile (climate change), and British American Tobacco (human health) are often praised for their ESG performance.?

The issue with these biodiversity ESG platforms is that they risk replicating the mistakes made in the carbon space. Many carbon-focused platforms have reduced the conversation to carbon footprinting and carbon credits, which, while useful, don’t tackle the root issue: the extractive relationship of the global economy with nature.

If impact investors are indeed allocating capital to effect meaningful change, they have a responsibility in shaping the future of corporate action, to go beyond compliance, and to avoid replicating the mistakes made for carbon, resulting in a significant resource misallocation and unprofitable portfolios.

We have seen this mistake happening in the carbon markets. Hundreds of millions invested into “Carbon Accounting and Climate Management” platforms in the early 2020s. But there is still no scientific evidence that companies that spend a lot of money on measuring and reporting their carbon emissions are necessarily decreasing their negative environmental impact quicker than others.

These platforms are more RegTech platforms (or in many cases, pre-regulatory tech) than impact tech.

A handful of winners, many losers, and no tangible impact.