Biodiversity Loss

From Open Risk Manual


Biodiversity Loss is the reduction in number of Species due to anthropogenic factors. It is the worldwide extinction of different species, as well as the local reduction or loss of species in a certain habitat, resulting in a loss (reduction) of biological diversity.

EEIO Approach

The impact of human economic activity on biodiversity loss can be approximated via an Environmental Input-Output Model[1], [2].

  • The first step is the combination of company or portfolio data with the MRIO model to translate into production and purchases per industry and region, in order to assess the impact of the whole upstream value chain
  • The second step gives information on the contributions of the activity to the drivers of biodiversity loss (e.g., emission of GHGs and consumption of raw materials and water). This is calculated based on the environmental extensions of the EEMRIO model.
  • The third step gives information on the loss of biodiversity caused per unit of driver (e.g., kg CO 2-eq, ton of raw material)


B_{j} = i (M * D) (I - A)^{-1} x_{j}


  • impact j is the biodiversity footprint of sector j
  • i is a (1 times t) vector of ones used to sum up the biodiversity losses caused by individual environmental pressure
    • t is the number of environmental pressures considered
    • r is the number of regions in the IO model
    • s is the number of industries in the IO model
  • M is the (t times r. s) matrix of biodiversity loss factors
  • m_{ij} is a (1 times s) row vector of biodiversity loss factors of direct environmental pressure i in region j (depicting the biodiversity losses per unit of environmental pressure)
  • D is the (t times r.s) matrix of direct environmental pressures
  • d^{i,j} is a (1 × s) row vector of direct environmental pressure intensities of pressure i in region j depicting the direct environmental pressures of one unit of production for all sectors
  • (I - A)^{-1} is the Leontief Inverse Matrix
  • x is a (r.s times 1) vector of production with zeros for all sectors except sector j (NB hence not the usual Final Demand vector)
  • Operation "*" is the element-wise multiplication of two matrices (Hadamard product)

Issues and Challenges

  • Indirect quantification of biodiversity loss that may be missing critical channels and mechanisms
  • Overall a linear approach that does not take into account dependencies in ecological systems


  1. CDC Biodiversite, GBS Review Input-Output Modelling, 2020
  2. Quantifying biodiversity footprints of Dutch economic sectors: A global supply-chain analysis Harry C. Wilting. Mark M.P. van Oorschot, 2017