Sectoral benchmarks / Technical annex

11 December 2020

1 General technical elements

1.1 Purpose of this document

This document provides methodological elements to understand how the sectoral benchmark factsheets are built and how computations and charts are obtained. It also provides additional content that could not be included in the factsheet due to space constraints. Such additional content relates to the perimeter of each factsheet, more detailed charts as well as guidance on how to read and use the factsheets.

The factsheets are short 4-page documents condensing information on a sector’s biodiversity performance. They provide information on the sector’s current contribution to biodiversity loss, its performance, how it compares to other sectors, how it will be affected by biodiversity loss and what possible actions can be taken to reduce its impacts on biodiversity.

The factsheets also provide detailed information on the sectors’ impacts on biodiversity, through breakdowns of the impact by both Scope and pressures and by subsectors when relevant.

Factsheets should be used by companies as a first rough assessessment of their impact on biodiversity as part of a given sector. Once they have evaluated their own impact with more precise and specific data, factsheets should be used by companies to assess their performance relative to their sector’s.

1.2 Required features of the factsheets

The factsheets are intended to be a first lever for companies and sectors to assess and understand their impacts on biodiversity and to implement strategies to achieve biodiversity gains. The specifications required to do so and to ensure that they empower companies and financial institutions to reverse their impact on biodiversity are presented below.

Factsheets are addressed to different types of readers and aim to be useful to all of them. They were thus designed to provide information to both potential users, namely companies and financial institutions, and other potential stakeholders such as consultants, NGOs, public authorities…

1 Ppb  (part per billion) is the equivalent of the percentage except that it gives a value per billion and not per hundred.

The aim is to produce benchmark sheets on biodiversity impact of sectors and to progressively cover all sectors. The first sectors studied are the priority ones, as defined by the French National Biodiversity Action Plan. Indeed the 31st action of the Plan states the following:

"[Action 31] By 2022, we will support four priority sectors (namely: the construction, food, energy and chemical sectors) to enable them to significantly reduce their biodiversity footprint along their whole value chain. Each sector will need to identify its own levers and work on trajectories and scenarios enabling the evolution of practices as well as of the necessary regulatory and methodological frameworks (guidance, labels, incentive tools, regulatory measures, green growth commitments, etc.) to support the transition, together with sector strategic committees" (Comité interministériel biodiversité, 2018).

Finally, the biodiversity footprint assessment of Schneider Electrics (Schneider Electric and CDC-Biodiversité 2020) was an opportunity to create the factsheed dedicated to the Manufacture of electrical equipment.

The other groups were partly driven by a value chain classification of the industries, as can be seen in Table 6.

1.3 Document content

Selection of figures and tables presented in the factsheets:

A few pertinent graphs were selected in order to keep the factsheet concise and clear. Including all figures would have been too space intensive and confusing for the reader.

Climate change impacts on biodiversity are reported separately. This allows to distinguish between impacts already tackled through the assessed entity’s climate policy and the non-climate impacts it needs to tackle through additional actions (CDC Biodiversité 2020c).

Nota Bene: the Ecotoxicity pressure is considered in the qualitative analysis , but not yet in quantitative figures.

1.4 How to use the benchmark sheet

• NACE codes and sectors descriptions displayed in the first section provide information on the activities covered by the factsheet and its perimeter.
• The main figures presented in the sheet should be used to assess a business or portfolio biodiversity performance compared to the average sector performance. However, environmental safeguards should be kept in mind during the assessment.
• It is important to understand that the sector average given by the factsheet is the overall performance of all the sub-sectors included in the factsheet. For instance, the figures presented in the factsheet “Agriculture and Agrifood” represent the impact caused by the EXIOBASE industry groups Manufacture of food products, Manufacture of beverages, Crop and animal production, as well as Hunting and other related service activities.

Impact expressed in MSA.km²/t of raw material may be provided for some sectors. They are calculated as explained in 2.2.

1.5 General information on the Global Biodiversity Score and the Mean Species Abundance

The Global Biodiversity Score (GBS) is a corporate biodiversity footprint assessment tool that enables to evaluate the impact of companies or investments on biodiversity. The footrprint in expressed in MSA.m², a unit derived from the Mean Species Abundance (MSA) metric. The latter is given as a percentage representing the intactness of the ecosystems. Indeed, the metric does not consider the genetic not the species diversity directly but only the the ecosystem diversity.

The GBS uses the concept of Scopes to avoid double counting when considering value chain impacts:

• The Scope 1 covers direct operation
• The Scope 2 covers non-fuel energy generation
• The Scope 3 covers all other purchases under Scope 3 upstream and downstream impacts reported under Scope 3 downstream

Finally, the GBS results are also differentiated between static and dynamic impacts. Static impacts being persistent ones while dynamic impacts being those occurring within the assessment period

For additional information see our report “Measuring the contributions of business and finance towards the post-2020 global biodiversity framework”, specially the figure 2 “Differences between metrics, units, tools and indicators” (CDC Biodiversité, 2020), as well as precedent reports on the GBS(CDC Biodiversité 2019; 2017).

The MSA and thus the GBS connect with both the Natural Capital Protocol, and natural capital assessments.

It is especially connected with steps 5 and 6 of the Natural Capital Protocol namely “measure impact drivers and/or dependencies” and “Measure changes in the state of natural capital. It also connects with step 7 “Value impacts and/or dependencies” but only partially.

Figure 1- The GBS connects with steps 5 and 6 (and partly 7) of the Natural Capital Protocol (for biodiversity).

The development status of the factsheets is summarized in Table 1.

Table 1: Factsheets progression and completion

2 Methods

2.1 How NACE and EXIOBASE are linked

CDC-biodiversité has started to link both databases manually, the correspondence obtained are shown here:

Table 2: Correspondance between EXIBOASE and NACE industries

2.2 Methodology to obtain the benchmark values

The GBS tool includes impact factors expressed in MSA.m²/kEUR of turnover.

Unless stated otherwise, the values given in the factsheets and displayed in graphs and tables are global values.

The calculation is not applicable for all industries as the impact factors are meaningful only for the industries producing raw materials (Cultivation of paddy rice, poultry farming are suitable industries but Processing of Impact expressed in MSA.km²/t of raw material may be provided for some sectors food products nec would not fit for instance).

To compute the values the impact of the raw material calculated to build a CommoTool is used, then the impact factor can be directly extracted from the impact factors of the Commotool tables (livestock_scope1_products_MSA_world.rda for instance) where they are given in MSA.km2/t for each pressure. The impact factors can then be summed up across pressures to obtain an aggregated figure.

A more thorough explanation of impact factors computations is given in “Measuring the contributions of business and finance towards the post 2020 global biodiversity framework”, p.8, “The GBS in short”(CDC Biodiversité 2020f).

Impact factors are given by commodity or by kEUR depending on the purpose of the assessment.

To obtain aggregated results:

• Impact factors by commodity and pressure are summed up.

For each benchmark sector, corresponding worldwide EXIOBASE industries are weighted based on the part of worldwide turnover attributed to agiven region, to obtain a regional impact factor for each industry. This first computation gives worldwide impact factors for each industry included in the benchmark sector. Finally, when there are multiple EXIOBASE industries included in the benchmark sector a weighted average based on the part of the worldwide benchmark sector turnover represented by the EXIOBASE industry.

The results are given in MSA.m²/kEUR and broken down by accounting category (static or dynamic) and biodiversity realm (terrestrial or aquatic), thus yielding four values2. Furthermore results are split by Scopes. The main figures given are the Scope 1 impact and the vertically integrated (egal to the sum of the Scope 1,2 and 3) impact. This is true of the results presented in the Box “Key Figures” on each factsheet.

In graphs impact values ar further splited by pressures as can be seen under the section “Impact drivers breakdown: what are the main ones” on each factsheet.

There are five terrestrial pressure types: climate change (CC), land use (LU), encroachment (E), fragmentation (F) and nitrogen deposition (N). land use, encroachment and fragmentation can also be grouped under the caption “spatial pressures”. More details about the different pressure types can be found in the GBS review (CDC Biodiversité 2020d).

There are also five types of aquatic pressures: hydrological disturbance (HD), wetland conversion (WC), land use in catchment of rivers (LUR), land use in catchment of wetlands (LUW), freshwater eutrophication (FE). More details about the different pressure types can be found in the GBS review (CDC Biodiversité 2020b).

2 At the current state of development (GBS 1.0.0) dynamic aquatic results are less robust and given only for informational purposes

2.3 Aggregation of the intensities in MSA.m2/kEUR

The factsheet also includes two levels of aggregation of impact.

Terrestrial and aquatic ecosystems can be aggregated by expressing both as a fraction of their respective global area. The total emerged land surface is 130.106 km² and the total surface of freshwater ecosystems (lakes, rivers and wetlands) is 11.106 km²(Lehner and Döll 2004). The former is used for impacts regarding terrestrial biodiversity while the latter is used for impacts on aquatic biodiversity. Figures are then expressed in MSA ppb/bEUR. For instance, for an impact intensity of 3200 MSA.m²/kEUR the corresponding aggregated value is 25 000 (3200/ 130*10^9*10^12).

After figures expressed in MSA ppb/bEUR an aggregated “score” can be computed using the following values (still in MSA ppb/bEUR): dynamic impact score + 1/50 of the static impact score, for both terrestrial and aquatic scores, and then by averaging the terrestrial and aquatic values. The reasoning behind the factor 1/50 is that a static impact is an opportunity cost, i.e. the persistence of the impact hindering biodiversity gains. This opportunity cost can be considered equal to the biodiversity gain which would occurr over the period (here, one year) if the impact stopped. The following simplifying assumptions are taken: 1) ecosystems can recover over a period of 50 years. This hypothesis made by CDC Biodiversity is in line with scientific studies (Schipper et al. 2016) that ecosystems recovery after land abandonment return to their integristy state after 50 years for non forest biomes. This assumption is also aligned with the ASN bank report (CREM and PRé Consultants 2016). And 2) recovery is linear. The opportunity cost is then 1/50 of the static impact. If we consider the following aggregated values: a terrestrial dynamic value of 75 MSA ppb/bEUR, a terrestrial static value of 25 000 MSA ppb/bEUR, an aquatic dynamic value of 82 and an aquatic static value of 32 000 MSA ppb/bEUR we obtain the following aggregated score : (75+25 000/50)/2 +(82+ 32 000/50)/2= 650.

Aggregated impacts can be found in the box “Key Figures” on each factsheet

2.4 Assessing the dependency of a sector on ecosystem services

A sector is dependent on an ecosystem service when at least one of its production processes depends on this service to function properly. The ENCORE (Exploring Natural Capital Opportunities, Risks and Exposure) (ENCORE 2019)4 assesses depencies of each sector to each ecosystem service. It is based on existing classifications of ecosystem services and economic sectors and dependencies are assessed through literature review and expert interviews when the literature is not sufficient.

4https://encore.naturalcapital.finance/en

A Direct dependencies

Based on this ENCORE database and on the EXIOBASE classification and industries descriptions sectoral dependency scores were computed for each EXIOBASE industry with the following methodology (Benchekroun, et al. 2020).

In order to obtain the ecosystem services dependency values, several information are connected: the sector (with associated ENCORE sub-industries and production processes), the global value added of the sector, the list of ecosystem services and the materiality of each ecosystem service for the industry. Three tables are used to do so:

• A table of materialities extracted from the ENCORE database reporting the materialities for each process of each ENCORE sub industry (classification based on the GICS classification). Materialities were converted into numbers between 0 and 100% (20% for Very Low, 40% for Low, 60% for Medium, 80% for High and 100% for Very High dependency). A weight was attributed to each ENCORE production process depending on its importance in the subindustry.
• A table of EXIOBASE industries, with their global production, the corresponding benchmark sector and their share in the production of the benchmark sector (used as weight).
• A correspondence table between EXIOBASE and ENCORE industries. ENCORE sub-industries which have no equivalent in ENXIOBASE are excluded. For each ENCORE sub-industry corresponding to an EXIOBASE industry, only the processes included in the definition of the EXIOBASE industry are kept.

The first and second tables are joined thanks to the third.

Finally, the dependency of the benchmark sector i on the ecosystem service j is calculated as:

This formula gives more weight tothe most important processes of an industry, to highest turnover industries and to highest materiality ratings. A single score is obtained through averaging the dependencies on all ecosystem services (Crépin 2020).

At the current stage of development only direct operations (Scope 1 operations) dependencies to ecosystem services can be computed and they are displayed in the box “Key Figures” on each factsheet.

3 Supplementary information for each factsheet

3.1 Agriculture and agrifood

A Methodology

Sector specific biodiversity dependency scores are computed and integrated to the factsheets. The score, comprised between 0 and 100%, makes visible the sector’s dependency on nature and the good functioning of ecosystem services

The ENCORE database attributes ecosystem services dependencies to all sectors from the global industry classification standards (GICS). The 11 sectors are divided in 157 sub-industries for which several production processes are connected. A materiality (inexistant, very low, low, medium, high or very high) to each ecosystem service is attributed to each production process.

B What does the sector include?

The name of the industry group “Crop and animal production, hunting and related service activities” was changed to “Crop and animal production” for simplification purposes. The impact of commercial hunting is not assessed by the GBS 1.0.0.

As can be seen on the Figure 2, Figre 3, Figure 4, Figure 5, Figure 6, Figure 7 and Figure 8 the “Fishing, operating of fish hatcheries and fish farms” and “Manure treatment (biogass), storage and land application” have been removed. The fishing sector was exluded from the GBS assessment because of the current lack of sufficient data and methods on marine biodiversity in the GBS(CDC Biodiversité 2020c). As for the manure sector, it was excluded due to a lack of information for most EXIOBASE regions, rendering averaged results biased.

C Additional results

The following calculations presented in the tables were made with the GBS 1.0.0 (August 2020) by Léa Crépin in September 2020.

Table 3:Scope 1 impact intensities for the agriculture and agrifood benchmark.

Table 4: Vertically integrated impact intensities for Agriculture and Agrifood.

Table 5: Impact factors for some products.

Figure 2- Breakdown by EXIOBASE industry and Scope, aquatic dynamic, vertically integrated

Figure 3- Breakdown by EXIOBASE industry and Scope, terrestrial dynamic, vertically integrated

Figure 4- Breakdown by EXIOBASE industry and Scope, aquatic static, vertically integrated

Figure 5- Breakdown by EXIOBASE industry and Scope, terrestrial static, vertically integrated

Figure 6- Breakdown by EXIOBASE industry and pressure, terrestrial static, vertically integrated

Figure 7- Breakdown by EXIOBASE industry and pressure, aquatic static, vertically integrated

Figure 8 - Breakdown by EXIOBASE industry and pressure, terrestrial dynamic, vertically integrated.

D Additional DNHS guidelines

The main Do No Significant Harm criteria for the sector (EU Technical Expert Group on Sustainable Finance 2020a) are provided in the factsheets. Additional criteria which did not fit within the factsheet are listed below (EU Technical Expert Group on Sustainable Finance 2020b).

To not harm the objective of Circular economy and waste prevention and recycling, activities should:

Minimise raw material use per unit of output, including energy through increased resource use efficiency.

Minimise the loss of nutrients (in particular nitrogen and phosphate) leaching out from the production system into the environment.

Use residues and by-products of the production or harvesting of crops to reduce demand for primary resources, in line with good agricultural practice.

For Livestock production: Activities should use residues and by-products and take any other measures to minimise primary raw material use per unit of output, including energy.

To not harm the objective of Pollution prevention and control:

Nutrients (fertilisers) and plant protection products (e.g. pesticides and herbicides) should be targeted in their application (in time and area treated) and be delivered at appropriate levels (with preference to sustainable biological, physical or other non-chemical methods if possible) and with appropriate equipment and techniques to reduce risk and impacts of pesticide use on human health and the environment (e.g. water and air pollution) and the loss of excess nutrients.

The use only of plant protection products with active substances that ensure high protection of human and animal health and the environment through leaching, volatilisation or oxidisation.

Ensure emissions to air, water and soil are within the BATAEL ranges / are prevented or reduced by using a combination of BAT techniques as set out in the BREF for the Intensive Rearing of Poultry or Pigs, and by using similar emission reducing techniques for dairy farming.

Ensure that mitigation and emission reduction techniques for feeding and housing of livestock and for manure storage and processing are applied, as recommended in the UNECE Framework Code for Good Agricultural Practice for Reducing Ammonia.

Where manure is applied to the land, activities should comply with the limit of 170kg nitrogen application per hectare per year, or alternatively, the derogated threshold where one has been set in that member state.

E Sources

« Biodiversité et Agriculture. 6 Recommendations pour la transition agroécologique des entreprises agroalimentaires ». Noé, février 2018. http://noe.org/wp-content/uploads/2018/03/NOE-RapportFili%C3%A8resWEB.compressed.pdf.

Dudley, Nigel, et Sasha Alexander. « Agriculture and biodiversity: a review ». Biodiversity, 28 juillet 2017, 1‑5. https://doi.org/10.1080/14888386.2017.1351892.

Entreprises pour l’environnement. « Companies and Biodiversity Managing Impacts on the Value Chain », mars 2017. http://www.epe-asso.org/en/companies-and-biodiversity-managing-impacts-on-the-value-chain-march-2017/.

Food and Agriculture Organization of the United Nations, Commission on Genetic Resources for Food and Agriculture, Julie Bélanger, et Dafydd Pilling. The State of the World’s Biodiversity for Food and Agriculture, 2019.

INRA. « How can French agriculture contribute to reducing greenhouse gas emissions? », 2013. https://www.inrae.fr/sites/default/files/pdf/etude-ges-synthese-version-anglaise-final.pdf.

World Business Council for Sustainable Development. « CEO Guide to Food System Transformation », octobre 2019. https://www.wbcsd.org/Programs/Food-and-Nature/Food-Land-Use/Resources/CEO-Guide-to-Food-System-Transformation.

4 Glossary

All definitions can be found in the document “How to conduct a Biodiversity Footprint Assessment with the Global Biodiversity Score” (CDC Biodiversité, 2019)

5 Sources

Benchekroun, Mohammed, Nicolas Graves, Yasser Labchiri, and Camille Wojcik. 2020. ‘What is the magnitude of biodiversity risk to the financial system ?’ 

CDC Biodiversité, Ecole Nationale des Ponts et Chaussées.CDC Biodiversité. 2017. ‘Global Biodiversity Score: Measuring a Company’s Biodiversity Footprint’. 11. Biodiv’2050 Outlook. http://www.mission-economie-biodiversite.com/downloads/biodiv2050-outlook-no-11/.

———. 2019. ‘Global Biodiversity Score: A Tool to Establish and Measure Corporate and Financial Commitments for Biodiversity’. 14. Biodiv’2050 Outlook. CDC Biodiversité. http://www.mission-economie-biodiversite.com/wp-content/uploads/2019/05/N14-TRAVAUX-DU-CLUB-B4B-GBS-UK-WEB.pdf.

———. 2020a. ‘GBS Review: Ecotoxicity Pressure on Biodiversity’. Final version.

———. 2020b. ‘GBS Review: Freshwater Pressures on Biodiversity’. Final version.

———. 2020c. ‘GBS Review: Quality Assurance’. Final version.

———. 2020d. ‘GBS Review: Terrestrial Pressures on Biodiversity’. Final version.

———. 2020e. ‘GBS Review: Wood Logs CommoTool’. Final version.

———. 2020f. ‘Measuring the Contributions of Business and Finance towards the Post-2020 Global Biodiversity Framework - 2019 Technical Update’. 15. Les Cahiers de BIODIV’2050. Paris. http://www.mission-economie-biodiversite.com/downloads/cahier-de-biodiv2050-n15-measuring-the-contributions-of-business-and-finance-towards-the-post-2020-global-biodiversity-framework/.

Convention of Biological Diversity. 2018. ‘International Expert Workshop on Biodiversity Mainstreaming in the Sectors of Energy and Mining, Manufacturing and Processing and Infrastructure - Background Document’. Cairo, Egypt. https://www.cbd.int/doc/c/9cfd/d1ce/5cc160b39f348ef7a7ea1f87/ms-ws-2018-01-03-en.pdf.

Crépin, Léa. 2020. ‘Impacts of Economic Sectors on Biodiversity. A Case Study of Agriculture and Agri-Food’. AgroParisTech.

ENCORE. 2019. ‘Methodology : Dependencies on Ecosystem Services’. Encore.Naturalcapital.Finance. 2019. https://encore.naturalcapital.finance/en/data-and-methodology/methodology.

EpE. 2016. ‘Entreprises et biodiversité Gérer les impacts sur la chaîne de valeur’. EpE. http://www.epe-asso.org/entreprises-et-biodiversite-gerer-les-impacts-sur-la-chaine-de-valeur-novembre-2016/.

EU Technical Expert Group on Sustainable Finance. 2020a. ‘Taxonomy: Final Report of the Technical Expert Group on Sustainable Finance’. European Commission.

———. 2020b. ‘Taxonomy Report: Technical Annex’. European Commission.

European Commission. Joint Research Centre. 2017. Food, Feed, Fibres, Fuels. Enough Biomass for a Sustainable Bioeconomy? LU: Publications Office. https://knowledge4policy.ec.europa.eu/publication/food-feed-fibres-fuels-enough-biomass-sustainable-bioeconomy_en.

EUROSTAT. 2008. NACE Rev. 2. Luxembourg: Office for Official Publications of the European Communities.Fertilisers Europe. 2019. ‘How Fertilisers Are Made’. https://www.fertilizerseurope.com/fertilizers-in-europe/how-fertilizers-are-made/.

International Council on Mining and Metals. 2006. ‘Good Practice Guidance for Mining and Biodiversity’. International Council on Mining and Metals. https://portals.iucn.org/library/sites/library/files/documents/2006-026.pdf.

Lehner, Bernhard, and Petra Döll. 2004. ‘Development and Validation of a Global Database of Lakes, Reservoirs and Wetlands’. Journal of Hydrology 296 (1–4): 1–22.

Muñoz, Ivan, Karin Flury, Niels Jungbluth, Giles Rigarlsford, Llorenç Milà i Canals, and Henry King. 2014. ‘Life Cycle Assessment of Bio-Based Ethanol Produced from Different Agricultural Feedstocks’. The International Journal of Life Cycle Assessment 19 (1): 109–19. https://doi.org/10.1007/s11367-013-0613-1.

Piotrowski, Stephan, Carus, Michael, and Dr. Carrez, Dirk. 2019. ‘European Bioeconomy in Figures 2008 – 2016’. Nova Institute. https://biconsortium.eu/sites/biconsortium.eu/files/documents/European%20Bioeconomy%20in%20Figures%202008%20-%202016_0.pdf.

Schipper, Aafke M., Johan R. Meijer, Rob Alkemade, and Mark A. J. Huijbregts. 2016. ‘The GLOBIO Model: A Technical Description of Version 3.5’. The Hague: Netherlands Environmental Agency (PBL). http://www.pbl.nl/sites/default/files/cms/publicaties/pbl_publication_2369.pdf.

Schneider Electric, and CDC-Biodiversité. 2020. ‘Assessing Biodiversity Footprint, the Occasion to Accelerate Corporate Biodiversity Strategy’.

Takkellapati, Sudhakar, Tao Li, and Michael A. Gonzalez. 2018. ‘An Overview of Biorefinery Derived Platform Chemicals from a Cellulose and Hemicellulose Biorefinery’. Clean Technologies and Environmental Policy 20 (7): 1615–30. https://doi.org/10.1007/s10098-018-1568-5.

van Crevel Rubie. 2016. ‘Bio-Based Food Packaging in Sustainable Development : Challenges and Opportunities to Utilize Biomass Residues from Agriculture and Forestry as a Feedstock for Bio-Based Food Packaging’. FAO. http://www.fao.org/forestry/45849-023667e93ce5f79f4df3c74688c2067cc.pdf.

Wood, S., and Annette Cowie. 2004. A Review of Greenhouse Gas Emission Factors for Fertiliser Production. Vol. 38.

Woods, Jeremy, Adrian Williams, John K. Hughes, Mairi Black, and Richard Murphy. 2010. ‘Energy and the Food System’. Philosophical Transactions of the Royal Society B: Biological Sciences 365 (1554): 2991–3006. https://doi.org/10.1098/rstb.2010.0172.

Yara. 2020. ‘Fertilizer Life Cycle Perspective’. https://www.yara.com/crop-nutrition/why-fertilizer/environment/fertilizer-life-cycle/.

6 Additional tables and figures

Table 16- Factsheet names per EXIOBASE industries