Biodiversity: the next frontier for companies and real estate portfolios

From climate to nature: the second front

For fifteen years, corporate environmental strategy focused on carbon. Biodiversity is now back at the top of the agenda, driven by unambiguous science: according to IPBES, the "IPCC for biodiversity", around one million species are threatened with extinction, under five main pressures — changes in land and sea use, direct exploitation of resources, climate change, pollution and invasive alien species.

In December 2022, the Kunming-Montreal Global Biodiversity Framework set 23 targets for 2030, including protecting 30% of land and seas and requiring large companies to assess and disclose their impacts and dependencies on nature. France has translated it into its National Biodiversity Strategy 2030.

For any organisation, the question is no longer whether biodiversity is relevant, but how to integrate it without treating it as a communications topic.

What reporting now requires

ESRS E4. Under the CSRD, biodiversity has its own reporting standard. It only applies if the topic is material in the double materiality assessment — which is common in real estate, agri-food, industry and retail. Companies must then describe their impacts, dependencies, policies, targets and metrics such as the footprint of their sites in or near sensitive areas.

TNFD recommendations. Published in September 2023, the recommendations of the Taskforce on Nature-related Financial Disclosures set out a four-step approach: locate interfaces with nature, evaluate dependencies and impacts, assess risks and opportunities, prepare to respond. Investors and banks increasingly draw on them.

Science-based targets for nature. Like SBTi for climate, the Science Based Targets Network publishes methods for setting targets on freshwater and land. They remain demanding, but already shape the most advanced approaches.

Buildings: the largest consumer of land

Land take is the leading cause of biodiversity loss in France. The 2021 Climate and Resilience Act set the target of Zero Net Land Take (ZAN) by 2050, with a first step of halving the rate at which natural, agricultural and forest land is consumed over 2021-2031.

For property owners, this translates into very practical changes: renovating and densifying existing sites is becoming the norm rather than new construction on greenfield land; local urban plans increasingly impose a biotope area factor; new commercial, industrial and office buildings must include renewable energy generation or green roofs, and large outdoor car parks must be fitted with solar canopies.

Practical levers for an existing portfolio

Anticipate protected wildlife before works. This is the most frequently overlooked aspect of energy renovation. Swifts, swallows, sparrows and bats nest in facades, lofts and shutter boxes. External wall insulation or roof works carried out during nesting season can destroy protected species, with criminal liability and site shutdowns. A prior ecological survey, an adapted schedule and nest boxes or bat roosts integrated into the insulation solve the problem at marginal cost.

Unseal and green surfaces. Car parks, courtyards and roofs offer significant potential. A green roof or an unsealed courtyard also reduces urban heat islands and improves summer comfort — with a direct effect on cooling needs, and therefore on the Tertiary Decree pathway.

Reduce light pollution. Outdoor night lighting heavily disrupts wildlife. French light pollution rules already regulate switch-off times and luminaire characteristics; going further by creating a "dark corridor" on sites often saves energy too.

Manage green spaces differently. Differentiated management, no pesticides, local species adapted to the future climate: these practices improve everyday biodiversity on sites while cutting maintenance costs and irrigation needs.

Climate and biodiversity: seek co-benefits, avoid trade-offs

The two issues do not always point in the same direction. A fast-growing single-species plantation stores carbon but depletes biodiversity; a poorly sited ground-mounted solar farm can take natural land. Conversely, restoring hedgerows, wetlands or diverse forests delivers benefits on both fronts.

This is a criterion we examine closely when selecting carbon projects: France's Label Bas Carbone, for example, recognises and documents the environmental co-benefits of forestry and agricultural projects.

As for the "biodiversity credits" emerging on the voluntary market, they are still at a very early stage: no common metric, standards under development, and a risk of confusion with the regulatory ecological offsetting required under the avoid-reduce-offset hierarchy. Caution is essential before using them as an argument.

Where to start

Locate. Identifying sites in or near ecologically sensitive areas (Natura 2000, ZNIEFF, ecological corridors) helps prioritise the effort.

Build biodiversity into the works plan. Every energy renovation, roof refurbishment or car park upgrade is an opportunity to address the issue at low cost — provided it is planned from the design stage.

Connect to reporting. Actions on the portfolio feed directly into the double materiality assessment and, where applicable, ESRS E4 metrics.

Let's discuss your environmental strategy: Kilowater integrates biodiversity into your portfolio's decarbonisation pathway, so that every project serves both goals.