From carbon to biodiversity: how companies can build the next layer of ESG strategy
By Impact Labs x Darwin
When companies think about sustainability, carbon has long dominated the conversation. Net-zero commitments, GHG Protocols, Scope 1-2-3 reporting—these have become familiar territory. But nature is not just about climate. Biodiversity loss is accelerating, driven by land use change, resource overexploitation, pollution, invasive species, and climate change itself. To truly future-proof their strategies, businesses must move beyond carbon and embrace biodiversity.
Why carbon and biodiversity are connected
The climate crisis and biodiversity erosion are two sides of the same environmental crisis. Intact ecosystems are essential for climate regulation: for example, tropical forests and peatlands store vast carbon stocks, and oceans absorb about 25% of annual CO₂ emissions. At the same time, unchecked global warming is already the third largest driver of species extinction (IPBES, 2019), after land-use change and direct exploitation.
Methodologically, carbon and biodiversity assessments share a similar logic:
mapping business operations and value chains upstream & downstream,
identifying physical flows (energy, land, water, raw materials),
collecting data directly or via LCA datasets.
In other words: businesses already familiar with carbon accounting will recognise many of the steps needed for biodiversity.
Why biodiversity is different
Yet biodiversity assessments introduce a new level of complexity:
One vs. five pressures: Carbon focuses on GHG emissions, while biodiversity spans five distinct pressures (land-use change, exploitation, pollution, invasive species, and climate change). The assessment is therefore heavier and more multidimensional.
Spatialisation matters: Carbon impacts are diffuse (a ton of CO₂ is fungible regardless of where it’s emitted), while biodiversity impacts are highly site-specific, often concentrated upstream at the interface with ecosystems. For instance, deforestation linked to soy in the Cerrado or palm oil in Indonesia creates different impacts than the same commodities grown in Europe.
Accounting systems differ: Carbon relies on mature standards (GHG Protocol, Bilan Carbone) and predefined “postes” or categories. Biodiversity frameworks are still converging and rely on the concept of “scopes.” Scope 2 plays a limited role in biodiversity assessments, since energy-related impacts are not concentrated at the point of electricity generation. There is therefore no need to isolate Scope 2 from Scope 3, and purchased energy is integrated upstream within Scope 3 instead.
No single metric: Carbon has CO₂e. Biodiversity uses multiple complementary indicators—Mean Species Abundance (MSA), Potentially Disappeared Fraction (PDF),ecosystem integrity indices (EII), etc.
The result: companies must adapt their ESG playbooks to deal with this multidimensionality.
Building bridges between carbon and biodiversity
The good news: carbon work can feed biodiversity assessments.
Carbon footprint outputs become data inputs for biodiversity footprints.
Inputs used for carbon—business activity data, financial and product data, site locations, sourcing location data—are equally relevant for biodiversity.
Land use conversion (FLAG categories) provides a direct bridge between climate and nature.
In short, companies don’t need to start from scratch. Existing carbon reporting systems can be leveraged to extend into biodiversity.
Why is it important for business to design holistic nature strategies
Integrating biodiversity into ESG is not just about compliance. It’s about managing risks and seizing opportunities.
More precisely, it’s about making informed trade-offs between carbon and biodiversity impacts: For example, focusing only on decarbonisation can create blind spots: a company may replace fossil-based plastics with bioplastics, reducing carbon emissions but driving up land and water pressures on biodiversity. Conversely, regenerative agriculture practices may deliver carbon sequestration and biodiversity gains simultaneously.
There are also strong synergies in sequencing or parallelising carbon and biodiversity assessments: companies can leverage the same data collection effort for both, saving time and reducing duplication.
With biodiversity rapidly rising on the ESG agenda (CSRD, SFDR, TNFD), early movers can differentiate themselves, reduce exposure to supply-chain risks, and shape industry standards.
How technology can help
Manual assessments are time-consuming and resource-intensive. Platforms like Darwin are actively building features that bridge carbon and biodiversity by:
Leveraging automation: exploring ways to automatically allocate carbon postes or categories to scope and economic activity, so that users can calculate both carbon and biodiversity footprints in one go.
Enhancing emission factor databases: today, carbon emission factors are much more granular at the product level, but they only cover carbon. We are developing methods to complement them by recomputing or extrapolating other physical flows (e.g., land, water, ecotoxicity) to capture the full range of biodiversity pressures.
Developing common traceability features: improving supply chain traceability so that the same infrastructure supports both carbon and biodiversity tracking. Ultimately, the shared goal is improving supply chain data quality. Today, only ~20% of companies have visibility beyond their tier-1 suppliers (BCG, 2022). Without better traceability, neither carbon nor biodiversity targets can be met.
Carbon was the first step. Biodiversity is the next frontier. Companies that integrate both will be better equipped to protect nature, strengthen resilience, and create long-term value.
We working on a building such bridge with ImpactLabs. If you’re interested, give us a shout.
