Nature PRISM: an automated open-source tool to capture perceptions of nature risk materiality

There are growing expectations that financial institutions and companies could, and should, play their part in finding solutions to biodiversity loss, for example, by investing in strategies that fully mitigate negative impacts on biodiversity and support the transition towards nature- positive economies. A key element of nature-related risk for investors and businesses is the "materiality" of their impacts on biodiversity. This includes financial, physical and reputational elements. Despite a proliferation of experimental tools for quantifying, assessing, and monitoring impacts on biodiversity (physical materiality), there is a gap as regards reputational materiality. Nature PRISM aims to complement existing approaches, by quantifying reputational materiality for industry, regulators, and investors. It is an automated data-driven tool, that assesses the perceived impact of corporate activity on biodiversity through a large-scale machine-learning analysis of publicly-available information. The tool is based on a Directed Acyclic Graph structured around a DAPSIR (Driver, Action, Pressure, State, Impact, Response) framework, providing a novel holistic approach to monitoring and reporting perceptions of biodiversity impacts. Importantly it picks up not just negative impacts, but also positive impacts and responses to biodiversity loss. We demonstrate the potential of Nature PRISM to reveal the extent of perceived correlations between drivers and biodiversity indicators across a wide range of sectors, using a novel dataset of over three million long-form news articles, identified through a set of expert- derived and industry-standard keywords. We also demonstrate the tool's potential to become a robust and comparable sector-specific indicator using a case study of housing developments in Europe. The tool has the potential to be a new and complementary evidence-based resource for investors, policymakers, and other stakeholders to assess reputational materiality and guide business decisions, disaggregatable by sector, geography, or individual company.