12.2.1.1 ESG Agencies

One of the preliminary research findings was that the quantity and quality of information concerning the relation between corporate activities and BES collected by ESG Agencies, is still very limited. A study of the websites of 27 ESG Agencies worldwide revealed that only eight indicate that they consider ' biodiversity' to be a separate indicator for their research and that they include this subject in their ratings. Four other agencies explicitly take biodiversity into consideration when producing position papers or sector briefs. Subsequently, eight of these 12 ESG Agencies were interviewed. Five of them indicated that they indeed use one or more indicators on biodiversity in their company assessments. Often, the assessment of BES factors consists of checking policies and management control systems of a company, according to a 'check-the-box' approach. Information disclosed by companies is the main source of information. Some ESG Agencies also take independent news sources into account in order to evaluate (perceived) company behaviour, or to assess whether companies comply with international conventions (e.g. the Convention on Biological Diversity - CBD). One ESG Agency takes an 'issue management approach', i.e. it focuses on a company's ability to manage potential impacts, thereby investigating and evaluating the company's responses to breaches of the CBD. None of the ESG Agencies monitor any metrics or actual proof of performance of companies in relation to BES impacts. In their assessments, all ESG Agencies interviewed include information on issues that are closely related to, or can be considered part of, the BES concept, such as the impact on freshwater resources and habitat destruction.

Another important observation is that the interviewed ESG Agencies focus first and foremost on the impact of companies on biodiversity in general. Only one ESG Agency currently takes into consideration the dependence of companies on BES and the future risks connected with the destruction of ecosystems, but only with regard to the food and beverage sector. Two ESG Agencies have taken initial steps to include the dependency perspective in their products. In both cases, plans are still at a conceptual stage.

Just one of the ESG Agencies indicated that it had received a specific request for biodiversity information from its clients. Some of the interviewees noticed some movement in the market. So far however, the requests have come from niche 'sophisticated' investors.1 As yet, there is relatively little mainstream investor knowledge of BES.