Updated indicators demonstrate best practice for positive impacts on biodiversity

Financial institutions are starting to realize the opportunities that investing in sustainable land use brings. Impact investors, particularly, are increasingly moving into this space, looking to add investments in sustainable agriculture, forestry and ecosystem restoration to their portfolios. Such investments generate not only financial returns but also positive impacts on biodiversity, climate adaptation and mitigation, and local livelihoods. However, it is important that these impacts are measured and evidenced robustly, yet cost-effectively, and achieving this balance can be tricky. 

To help guide investors on this issue, UNEP-WCMC has worked with UN Environment Programme colleagues and a network of impact funds to generate the Positive Impact Indicators Directory. The Directory contains a shortlist of indicators to help investors measure their positive impact across several areas: biodiversity, sustainable production, climate action and livelihoods. This holistic approach is central to investing sustainably in land use.  

The Directory has been evolving since 2019, aiming to keep track of developments in impact metric development. Our recently launched updates focus on biodiversity and forests indicators and provide clear guidance on best practice for measuring positive impacts on biodiversity at a site and portfolio level. These updates build on metrics expertise at UNEP-WCMC and bring the Directory into line with recommendations from the Taskforce on Nature-related Financial Disclosures (TNFD) and the Nature Positive Initiative’s draft State of Nature indicators. 

Latest updates to the Positive Impact Indicators Directory 

The updates to the indicators were informed by the components of state of nature measurement highlighted by the TNFD, which builds on the Align guidance. This guidance acknowledges ecosystems and species metrics as key components for measuring the state of nature. Ecosystem metrics are further divided into extent and condition metrics. While positive impact indicators based on ecosystem extent (eg. ‘Area of…’) are simpler to measure, it is important to complement them with a measurement of the condition of that area. Without a measure of condition, it is not possible to properly capture the benefits (or otherwise) that an intervention has generated in the area.   

We have also integrated significance considerations into the updated set of biodiversity indicators. This recognizes that different ecosystems will have different levels of significance in relation to global conservation and restoration aims. Restoring a very rare ecosystem with many endangered species, for example, would contribute more to global ecosystem diversity than restoring a relatively commonly occurring ecosystem. This also aligns with the TNFD’s criteria for sensitive location identification. 

Finally, recognizing the importance of protecting and conserving all ecosystems, we have taken the decision to remove the forests impact area. The three previous forests impact indicators have been relocated, with ‘Area of natural forest under protection’ and ‘Area under management for forest restoration’ reflected within the updated biodiversity indicators, and ‘Forest under sustainable forest management’ moved into the sustainable production impact area. We still encourage users to disaggregate biodiversity impacts by ecosystem type, as relevant to their specific needs and investment aims. 

The new set of biodiversity positive impact indicators is as follows: 

• Area of natural ecosystem protected 

• Ecosystem condition change, by ecosystem type 

• Change in population size of selected indicator species 

• Area under ecological restoration 

• Species Threat Abatement and Recovery (STAR) value of land protected 

• Species Threat Abatement and Recovery (STAR) value of land under ecological restoration. 

To view the full list of indicators and investigate the methodologies further, visit the Land Use Finance Impact Hub. 

You can find more information on the changes to the Positive Impact Indicators Directory in this guide, which details all the updates from the previous version. 

Main image: Aerial view of lush green rice field with small winding canal. Sustainable agriculture landscape. Photo by Adobe Stock