10004419Biodiversity Risk and Impact ToolkitClosedCollaborative R&DInnovate UKVivid Economics, Neural Alpha and the Natural History Museum have teamed up to combine their leading expertise to address one of the most pressing global issues of this century. Biodiversity protection is rapidly becoming a global priority and addressing the human drivers of biodiversity loss are crucial. The IPBES Global Assessment report concluded in 2019 that around one million plant and animal species are at risk of extinction globally and has called for urgent policy responses to reverse the loss of natural ecosystems, habitats and species. In October 2020, IPBES published the results of an expert panel drawing a clear link between habitat and ecosystem loss and pandemics, with trillions of dollars in economic costs. The financial sector is likely to be significantly affected by future losses in global ecosystems and biodiversity (physical risk), as well as by the policies put in place to protect biodiversity (transition risk). We are currently seeing rising awareness in the market, as evidenced by the soon-to-be-announced Taskforce on Nature-related Financial Disclosure (TNFD), and by the widespread engagement with financial institutions on the topic through initiatives like the UN Principles for Responsible Investment, UNEP Finance Initiative, and Finance for Biodiversity. As a result, demand from investors for biodiversity-focussed sustainable investment tools is increasing. The Biodiversity Risk and Impact Toolkit (BRIT) will enable financial institutions and investors to assess whether changes to the natural world and policies to protect it will put their investments at risk, or conversely, generate opportunities. It also enables investors and companies to assess the impact they are having on biodiversity. This allows financial institutions to report their risk exposure to clients, shareholders and regulators; to manage that risk effectively; and to optimally reallocate their financing to avoid the risk. In the last two years, we have seen the market for such analysis mature rapidly in the area of climate change, and demand for similar services is now emerging with regards to biodiversity. The BRIT meets this demand by deploying state of the art data collection and analysis to link assets and operations in biodiversity-sensitive areas to company supply chains, by simulating the physical and transition risk through spatially explicit scenarios, and by economic modelling and quantifying the impacts on specific markets and the financed companies and assets that form that market.