Eco-acoustics technology demonstrates viable use in portfolio risk management

Eco-acoustics is a study of the relationship between sound and the environment

  • Second eco-acoustics study demonstrates large scale, cost-efficient biodiversity monitoring is possible and adaptable across new geographies and ecosystems
  • Use of eco-acoustics is a valuable exercise for gaining increased consistency and transparency from portfolio companies regarding biodiversity impact
  • Conservation efforts by palm oil company surveyed demonstrate promising biodiversity recovery

There is a growing need for methods to measure investee progress on achieving biodiversity goals. However, obtaining reliable real-time data to evaluate the success of corporate biodiversity management strategies, remains a key challenge.

To gain a deeper understanding of measuring biodiversity loss, Cardano, Fidelity International, Goldman Sachs Asset Management and Nomura Asset Management sponsored Green Praxis, a nature based solution provider, to undertake an eco-acoustics study to compare biodiversity levels in various plots – a control plot, a conservation area, and a production area – first in Indonesia and most recently in Malaysia.

The second iteration of the study sought to improve biodiversity assessments using audio recordings combined with automated analysis to evaluate biodiversity and habitat restoration efforts, helping to measure risk to portfolio assets and their environmental impact.

Improvements following the first study

This study saw enhanced data collection with a larger set gathered over three weeks across different forest plots using both high-end and affordable AudioMoth devices for scalability. Machine learning was integrated to automate habitat classification and biodiversity scoring, and proved useful in accurately distinguishing between production, conservation and pristine forest plots. The team was also able to access the Ulu Kinta Forest Reserve, one of the oldest tropical rainforests globally. This pristine area served as a strong control plot – something which was unavailable in the first study due to the extent of deforestation in Indonesia.

Key findings

  • Biodiversity patterns

    Conservation plots exhibited biodiversity levels that were halfway between those of pristine and production plots. This indicates effective restoration efforts in the 10 years since the conservation plots were established, while pristine plots had unique biodiversity features not present in production land. 

  • Species insights

    Analysis of bird species revealed that over two-fifths (41%) of bird species in pristine plots were unique, highlighting their distinctiveness. Conservation areas shared approximately half (50%) of their species with both production and pristine plots. Conservation areas possessed unique species characteristics shared with both pristine and production plots, whereas pristine and production plots had minimal overlap. 

  • Technical advances

    The integration of machine learning into the analysis facilitated quicker scalability by classifying plot types and assigning biodiversity scores, while AudioMoth recorders proved to be just as reliable as more expensive devices, enabling wider adoption. These low-cost devices also lessened security concerns when left in the field for extended periods, allowing for broader application across diverse locations, and spectrograms (allowing us to ‘see’ the sound via frequencies), demonstrated strong consistency in results from both device types.

Investor impacts

Greta Fearman, Head of Stewardship, Cardano commented: “The results of this study suggest that the conservation efforts implemented by the palm oil company surveyed are leading to promising biodiversity recovery. It also demonstrates that large-scale, inexpensive biodiversity monitoring is possible, and that eco-acoustics can adapt to new geographies and ecosystems. There is still progress to be made to refine the tools but the results are positive.

“This approach could prove valuable to the investor community as it seeks increased consistency and transparency from portfolio companies about their biodiversity impact, as well as provide a tool for companies to quantitatively measure progress towards achieving their environmental goals. We would therefore encourage companies and their suppliers to consider incorporating this technology into their own biodiversity monitoring processes.”

Jenn-Hui Tan, Chief Sustainability Officer, Fidelity International commented: “Unlike climate change and greenhouse gas (GHG) emissions, nature loss is hard to measure with a single metric. That’s why we believe financial institutions have an important role to play in supporting the scientific community by funding research into innovative solutions for the measurement and monitoring of nature, including eco-acoustics. We are encouraged by the results of this research. Not only does it show that biodiversity revival is possible, but highlights the feasibility of cost-effective biodiversity monitoring in the future. With further refinement, we hope this could lead to wider-scale adoption, helping more exposed companies monitor and track their biodiversity footprints with greater clarity and precision.”