Challenges and pathways for matching corporate value-chain biodiversity losses and gains

In the context of ambitious global biodiversity goals, the need to compensate for the impact of corporate activities is no longer restricted to direct impacts but extends to the entire value chain of corporations. This is challenging, considering the substantial uncertainties involved in measuring corporate value-chain biodiversity losses and gains, which render their comparison difficult. Corporations run the risk of taking inadequate action and making compensatory statements that are not supported by equivalent losses and gains, potentially exacerbating loss of biodiversity, instead of supporting its recovery, and exposing companies to operational, regulatory, market, reputational, and financial risks. We considered the sources of uncertainty that hinder the accuracy of corporate biodiversity impact measurements (limited data, complex value chains, assumptions in calculation methods and models, imperfect matching of metrics and reality, lack of counterfactuals). We also considered approaches that can be used to match loss and gain metrics: measureing both with a unique metric, conversing between metrics, and monetary valuation. We then devised a framework that represents the risk of making inappropriate statements depending on the level of uncertainty of measured value-chain biodiversity impacts to help corporations in making more credible claims.