Financial institutions and large corporations are increasingly recognising that sustainable finance, any financial service integrating environmental, social, and governance (ESG) criteria, is critical for long-term value. This includes instruments like green loans, sustainable loans, and sustainable bonds that fund environmentally beneficial projects or tie terms to sustainability performance.
Meanwhile, biodiversity scoring has emerged as a key innovation in sustainable finance, quantifying an organisation’s impact on ecosystems. With biodiversity loss now a front-and-centre issue, companies are incorporating biodiversity metrics into ESG strategies to demonstrate measurable environmental stewardship.
This article explores how biodiversity scoring is shaping ESG ratings and unlocking green finance, and why Gentian’s True Sage solution is a smart choice for biodiversity assessment.
Jump to Section:
- How Biodiversity Scoring Can Help ESG Ratings
- ESG Ratings and Green Loans
- Choose Gentian True Sage for your Biodiversity Assessment
How Biodiversity Scoring Can Help ESG Ratings
Biodiversity scoring converts ecological data into actionable metrics, offering multiple benefits for improving ESG performance and ratings. Below we break down several ways a robust biodiversity score can add value to ESG initiatives:
Measurable Environmental Impact
One of the greatest advantages of biodiversity scoring is that it provides a quantifiable measure of environmental impact. Companies can move beyond vague promises and use concrete biodiversity metrics (such as habitat quality or “biodiversity units”) to track progress.
This means organisations can demonstrate real, data-driven improvements in ecosystem health – for example, a Gentian client used True Sage to reveal a 29.42-unit increase in biodiversity from 2016 to 2023 across their sites, proving a measurable net gain. Such hard evidence of biodiversity uplift can directly feed into ESG ratings, showing rating agencies and stakeholders that the company’s environmental initiatives are effective.
In short, biodiversity scores turn ecological impact into a number that boards and investors can monitor, making environmental performance as tangible as financial returns.
Transparency and Accountability
In the era of ESG scrutiny, transparency is paramount. Biodiversity scoring creates a clear and standardised way to report nature-related performance, enhancing transparency and accountability in sustainability reporting.
Instead of qualitative descriptions, companies can publish biodiversity scores or indices in their ESG disclosures, allowing investors and regulators to see exactly how nature is being managed. This fosters accountability – firms can be held responsible for year-over-year changes in their biodiversity score. Indeed, global ESG frameworks are pushing in this direction; organisations and governments are “seeking to formalise biodiversity commitments and transparency” in response to nature-related risks.
A transparent biodiversity metric gives companies credibility: they are seen as honest about their environmental footprint and committed to improvement. This improved trust can positively influence ESG rating assessments, which reward robust disclosure and verifiable data.
Identification of Financial Risks
Biodiversity loss isn’t just an ecological concern – it’s a financial risk. By quantifying biodiversity, companies can identify and mitigate nature-related financial risks as part of their ESG risk management. A biodiversity score can highlight vulnerabilities (e.g. reliance on resources from fragile ecosystems or exposure to deforestation in the supply chain) that might not be apparent from carbon metrics alone.
The economic stakes are enormous: roughly $44 trillion of global economic value – over half of world GDP – is moderately or highly dependent on nature’s services, and thus exposed to risks from nature loss. In the banking sector, Deloitte estimates that US banks hold at least $1.7 trillion in loans to sectors facing potential natural capital loss, underscoring how biodiversity risks translate into credit and market risks.
Incorporating biodiversity scoring into ESG frameworks helps companies proactively manage these risks. Firms that understand their biodiversity score can take action (conservation efforts, sustainable sourcing, habitat restoration) to prevent biodiversity-related disruptions, thereby protecting their financial performance and satisfying ESG rating criteria around risk management.
Integration into ESG Frameworks
As ESG methodologies evolve, biodiversity metrics are increasingly being woven into standard frameworks and regulations. Tools like biodiversity scoring make it easier for companies to integrate nature into their ESG frameworks and compliance obligations.
For instance, the new Taskforce on Nature-related Financial Disclosures (TNFD), a “sister framework” to the well-known climate-focused TCFD, is creating guidelines for companies to assess and report nature-related risks alongside climate risks. Likewise, global reporting standards are expanding to include biodiversity (the European Union’s CSRD now has a specific standard for biodiversity, and CDP questionnaires have added biodiversity sections). It’s predicted that within the next 3–5 years, reporting on biodiversity footprints and targets will become as mainstream as carbon reporting, with stakeholders expecting detailed nature-related disclosures from all companies.
A credible biodiversity score positions a company ahead of this curve: it can be directly plugged into ESG ratings, sustainability reports, and investor presentations. Essentially, biodiversity scoring provides a ready-made KPI that aligns with emerging ESG requirements, ensuring companies can meet new standards and even gain favourable consideration from rating agencies that are starting to factor in biodiversity & natural capital performance.
BNG Mandated by Legislation
Beyond voluntary frameworks, legislation is making biodiversity measurement a necessity in some jurisdictions. A prime example is the United Kingdom’s recent mandate on Biodiversity Net Gain (BNG). The UK Environment Act 2021 requires that most new developments deliver at least a 10% increase in biodiversity value compared to the pre-development baseline, as a condition for planning permission.
This BNG rule, which became mandatory in 2024, effectively forces developers and companies to quantify biodiversity loss and gains using a standardised metric. In practice, that means conducting habitat surveys, calculating biodiversity scores (using approved biodiversity metrics), and reporting those figures to authorities to prove the net gain.
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Similar regulatory trends are emerging elsewhere as governments respond to the biodiversity crisis. For corporations, this is a wake-up call: biodiversity scoring is no longer just a nice-to-have for ESG—it’s becoming a legal compliance issue. Companies that adopt biodiversity assessment tools now will more easily meet these regulatory demands. Moreover, showing readiness to comply with BNG-style laws can boost a firm’s ESG rating (under the Governance and Environmental pillars) by demonstrating proactive risk management and adherence to evolving environmental legislation.
In short, mandated BNG underscores the future: businesses will be scored on biodiversity, whether by regulators or ratings, and those ahead of the game will be rewarded.
ESG Ratings and Green Loans
ESG ratings aren’t just report cards – they carry real financial weight. A strong ESG performance, bolstered by robust biodiversity scores, can unlock access to green financing such as green loans, sustainability-linked loans, and sustainable bonds.
The logic is straightforward: lenders and investors view companies with high ESG ratings as lower-risk and more future-proof, making them more eager to offer favourable terms. In fact, sustainability-linked loan structures explicitly tie the cost of capital to ESG metrics. According to the Loan Market Association, these innovative loans allow banks to incentivise improvements in a borrower’s sustainability profile by linking loan terms to ESG performance targets (e.g. the company’s ESG rating).
Practically speaking, if a company improves its ESG score – which could include hitting biodiversity targets or reducing nature-related risks – the interest rate on its sustainability-linked loan can drop. Conversely, a fall in ESG score might trigger a penalty or higher rate and a higher ESG rating can lead to lower cost of capital on such loans.
Financial institutions prefer to channel these funds to companies that can demonstrate impact. Thus, a solid ESG rating underpinned by biodiversity scoring can be the key to securing green loans and tapping into the sustainable bonds market. In essence, strong ESG = strong financing opportunities: organisations that excel in biodiversity and ESG are well positioned to attract green capital and enjoy the reputational benefits and lower financing costs that come with it.
Choose Gentian True Sage for your Biodiversity Assessment
When it comes to putting biodiversity scoring into practice, Gentian True Sage stands out as the smart solution for organisations seeking reliable, fast, and expert biodiversity assessments. Gentian True Sage is a powerful AI-driven, cloud-based platform purpose-built for biodiversity scoring and reporting. It leverages high-resolution satellite imagery (up to 50 cm detail) and advanced AI algorithms to remotely map habitats and evaluate biodiversity across even the largest portfolios with exceptional precision.
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The technology delivers precise, data-rich assessments, enabling you to map habitats and track ecological changes over time, all while meeting compliance needs with unparalleled efficiency. Because everything is done via remote sensing and machine learning, True Sage operates at speed and scale: what once took months of on-the-ground surveys can now be accomplished in days.
For example, using Gentian True Sage, a client was able to survey 50+ sites in just 90 days, uncovering a 29-unit increase in biodiversity and replacing costly manual surveys with rapid digital insights. This kind of speed and scalability means you can quickly get the biodiversity baseline of all your sites, identify hotspots or risks, and integrate the results into your ESG dashboards without delay.
Beyond the cutting-edge tech, Gentian offers the human expertise to back it up. Our team includes seasoned ecologists, AI specialists, and earth observation experts who validate the AI findings and ensure accuracy every step of the way. Every Gentian True Sage assessment is quality-checked by our expert ecology team, giving you confidence that the biodiversity scores and habitat maps are scientifically sound.
The result is trusted, standardised biodiversity data for each of your locations – free from the inconsistencies that plague traditional field surveys. Gentian True Sage helps you not only measure biodiversity but also act on it: the platform highlights opportunities for biodiversity uplift and can simulate changes (for instance, if you restore a wetland, how will your score improve?). Crucially, it’s designed to align with emerging frameworks like BNG, TNFD, and CSRD, so you can ensure compliance effortlessly while reducing reporting burden. Reports and outputs from True Sage slot neatly into your ESG reporting cycle, and interactive dashboards let you and your stakeholders explore the data in detail.
By choosing Gentian True Sage, your organisation gains a pragmatic and trustworthy partner in the journey toward sustainable finance. This innovative tool is pioneering biodiversity scoring in a way that no competitor currently offers – giving you a head start in an area of ESG that is rapidly gaining prominence. Gentian’s solution delivers the actionable insights and metrics needed to strengthen ESG ratings, attract green loans, and satisfy regulators, all while contributing to the global effort to halt biodiversity loss. It’s a future-facing approach: as sustainable finance evolves, having Gentian True Sage means you’re already equipped with the data-driven understanding of nature that investors and regulators will demand.
Embrace the future of sustainable finance today by making biodiversity a core part of your ESG strategy, and let Gentian True Sage be your guide in measuring, managing, and monetising your natural capital performance. Together, we can drive finance toward a truly nature-positive future.
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