ENCORE

Overview

• ENCORE — which stands for Exploring Natural Capital Opportunities, Risks, and Exposure — is a dataset and online tool developed through a collaboration involving Global Canopy, the UNEP Finance Initiative, and the UN Environment Programme World Conservation Monitoring Centre (UNEP-WCMC).
• It first launched in 2018 to help financial institutions and companies understand how their activities rely on nature; then in 2019 it introduced the capability to assess how those activities impact nature. In 2024, ENCORE was updated again, this time informed by the SUSTAIN project, which provided new research for refining both its methodologies and data sets.
• The central element of ENCORE is the knowledge base, which contains 2 main "pathways": one focused on dependencies and the other on impacts.
• These pathways are connected through ecosystem components, enabling users to investigate how their impacts on nature may affect the services on which they depend, and vice versa. During the 2024 update, both pathways were reviewed and improved to incorporate the latest scientific understanding of ecosystem dynamics.

Dependencies

• Within the dependency pathway, research had initially examined how 271 different economic activities depend on 25 ecosystem services. That research drew upon literature reviews of scientific journals, peer-reviewed papers, and grey literature, supplemented by targeted investigations of leading companies and industry initiatives. Industry experts from various sectors then reviewed the findings, yielding an extensive list of activities and services.
• Each valid link between an economic activity and an ecosystem service received a materiality rating (5 levels ranking ranging "Very high" to "Very low"), while links that lacked sufficient data or relevance were marked as ND (No Data) or N/A (Not Applicable).
• Once these connections between economic sectors and services were established, attention shifted to the ecosystem components that support each service. Desk reviews of scientific and grey literature updated how these services are underpinned by different ecosystem types and components.
• The IUCN Global Ecosystem Typology (GET) 2.0 now structures this classification, assigning importance ratings of 1 or 0 based on relevance. A framework of Red-Amber-Green criteria guided judgments about how critical each component is in providing a given service, and this revamped approach gives the ENCORE knowledge base a stronger foundation for future improvements.

Impacts

• The impact pathway follows a similar process of review but focuses on the pressures, sometimes referred to as impact drivers, that economic activities exert on the environment.
• It uses the same type of in-depth literature searches, expert input, and standardized approaches as the dependency pathway.
• The result is a systematic listing of pressures per economic activity. Each pressure-activity link is assigned a materiality rating (same 5 levels ranking ranging "Very high" to "Very low"), with insufficient data or irrelevant combinations again marked as ND or N/A.
• ENCORE's knowledge base then connects these pressures to mechanisms that change the state of ecosystems, and finally links those mechanisms to specific ecosystem components. This additional layer of detail explains how pressures from economic activities can alter the ecosystem services on which those same activities depend.

2024 update

The update includes:

• a shift from 92 'production processes' to 271 'economic activities,' classified under the International Standard Industrial Classification (ISIC). This wider scope offers more detailed coverage of sectors ranging from livestock farming to nuclear power production.
• Cultural Ecosystem Services are now also included, ensuring that aspects such as recreation, aesthetic appeal, and spiritual or symbolic values are captured.
• They expanded data to help users trace how their value chains (2 tiers of suppliers and 2 tiers of consumers for each activity) may indirectly influence or rely on nature.
• The method for rating materiality has been improved to facilitate clearer, more comparable assessments of how significant each potential dependence or impact is.

Darwin's use of ENCORE indicators

Darwin maps 34 ENCORE indicators to its risk assessment modules — 11 from the impact pathway and 23 from the dependency pathway. Two impact drivers (GHG emissions and abiotic resource extraction) and two ecosystem services (global climate regulation, rainfall pattern regulation) are excluded as they fall outside the scope of the current assessment framework.

Impact indicators (11) — used for transition risk assessment

Dependency indicators (23) — used for physical risk assessment

All 34 indicators are used in the financial risk exposure and nature VaR modules. In the priority sites module, coverage is currently 10 impact indicators and 8 dependency indicators and is being progressively expanded.