Biodiversity screening for E.ON, a large European energy supplier

Large companies typically work with many suppliers. Developing a comprehensive management plan that covers a company's entire supply chain, or at least its most important aspects, can therefore be a major challenge.

As part of a risk assessment in line with the requirements of the Taskforce on Nature-related Financial Disclosure (TNFD), AFRY helped one of Germany's largest energy suppliers gain important insights into its impacts and dependencies on nature. This included not only its own operations, but also some of its key suppliers.

ENCORE (Exploring Natural Capital Opportunities, Risks, and Exposures) was used as a first step in the materiality analysis at the sector level. This tool allows for the inclusion of multiple production processes and, therefore, a comparative analysis. In the energy sector, processes such as hydropower generation, nuclear and thermal power plants or electricity transmission and distribution can be selected. The results show both which production processes are most dependent on nature and which ecosystem services and natural capital values are most affected by the processes considered.

The second step of the analysis was a site-specific assessment using the Integrated Biodiversity Assessment Tool (IBAT). Using geo-referenced data, we carried out a distance analysis for selected sites, providing information on how many protected areas and areas of conservation interest are located within a certain radius of the sites. IBAT also accesses the IUCN Red List of Threatened Species database to overlay the range of these species, as well as the STAR metric, which represents the restoration potential of an area.

By combining sector and site-specific information, AFRY created an individual biodiversity risk profile for the company. A final ranking system identified several sites in sensitive areas that can be prioritised for mitigation measures in further steps and considered in future supplier selection decisions.