Nature and Spatial Finance

We have taken nature as the basis of all human economic activity for granted. The economy and the finance sector depend as well as impact nature. Financial decisions need to take these risks and opportunities into account. To date such assessments have been difficult. However, with the advance in geo-spatial and earth observation data combined with artificial intelligence and machine learning, new opportunities are rapidly developing to manage risk, opportunity and impact. This new and emerging field is called Spatial Finance.

Through the application of the WWF-SIGHT data and tool, WWF-UK has been developing case studies and engagement with the finance sector for a number of years. We now actively advocate for spatial finance approaches and tools to be rapidly provided by third party data providers and adopted by finance institutions. 

This report with the World Bank, Global Canopy and many other contributors asks the question, what can be achieved now with geospatial ESG driven techniques to better understand the environmental impact of companies?

The paper shows that, via a triangulation of data methods (GIS, Remote Sensing, machine leaning, etc), it is increasingly possible to gain robust independent insight. Not only into which companies, and nations have assets in ‘environmentally sensitivity’ sites, but also insight into the extent of the initial and ongoing environmental high-level impact. Often this is possible across entire sectors enabling local, peer, or global comparisons. To demonstrate this the paper runs through three case studies at the 1) asset 2) company and 3) sovereign level within Brazil. Showing in detail how such data approaches are run, highlighting the various trade-offs and complications but also their applicability at differing scales and with data gaps.

Today, the world of geospatial ESG is at an exciting point in time, where arguably the potential is only just beginning to be recognized and explored in the mainstream. It is encouraging to see that many actors are developing more robust solutions in this space. Combined with future improvements in remote sensing and ground data collection, it can be expected that significant gains in this space will be achieved in the near-term term.

WWF collaborated with Invested Asset Management on research to explore the use of geo-spatial data and satellite imagery to assess and monitor environmental risk in sovereign debt investing. At the end of 2018, an estimated US$66 trillion of sovereign debt was outstanding, constituting a significant proportion of the assets in the global bond market. Given the size of this asset class and the positive influence bondholders can exert on governments, the engagement of sovereign debt investors will be critical in moving towards the sustainable management of our planet's natural resources.

We argue that spatial finance approaches and methods have huge potential to improve the engagement with sovereign debt issuers and for assessing countries environmental risk and opportunities for recovery. 

WWF-SIGHT enables us to engage at an early stage with governments, companies and investors. It allows us to enter into constructive dialogue about alternative and more sustainable land-use and development scenarios that would avoid possible damage to wildlife and habitats and the associated business risks. Find out more or watch our video.

Our World Heritage Site Report

'Safeguarding Outstanding Natural Value' is our joint report with Aviva Investors and Investec Asset Management, launched in September 2015. This report focuses on the role of institutional investors in protecting natural World Heritage sites from extractive activity. It for the first time produces a global figure of potential threat of the extractive activity to natural World Heritage Sites based on geo-spatial overlap analysis.