What gets measured gets managed. But how do you measure something as complicated as biodiversity? We follow a team of researchers from the south of France into the jungles of Borneo to learn how analysis of sound recordings could soon help investors and companies better assess biodiversity risks.
Aix-en-Provence, France, February 2023. A young environmental researcher plays a series of wildlife recordings taken on a palm oil plantation in Borneo. The room fills with the call of hornbills and chirruping of crickets. On the screen, two black rectangles flicker with colours.
These are spectrograms, a visual representation of the sounds we can hear. “The black is silence,” explains the researcher, Iván Beltrán, one of the team at French start-up Green PRAXIS, which is conducting the study. The spectrograms allow the team to see at a glance anything that warrants further examination. With enough experience it is possible to take one look at an image and pick out species groups as well as tell what time of day a recording was made.
Towards the bottom of the chart is a thick red line.
“This band is insects.”
Just below it we also see the call of a solitary bird.
Iván points to the second spectrogram.
“Here there is an insect band as well but in the middle you see a lot of birds.”
Watching the presentation is a small group of investment professionals. They have come to Aix to hear an update on the research they have sponsored into using these sound recordings to measure levels of biodiversity. In other words, capturing not creatures but the noises creatures make - a field of study called bioacoustics.
At present, the standardised tools financial institutions use to measure biodiversity tend to rely on modelling the potential impact an activity will have, based on what is known about the location where it happens, rather than on direct measures of impact. The goal of the project is to develop a fast, affordable, and reliable way to assess directly the state of biodiversity in a given location, both in terms of species richness (how many different species groups there are) and species abundance (how many of each species group), and so capture the kind of biodiversity data investors need to make intelligent decisions.
“Solving the biodiversity challenge may surpass decarbonisation as the largest investment megatrend of our lifetime,” says Velislava Dimitrova, a portfolio manager at Fidelity International. “The data we have available to us currently around biodiversity is insufficient to be able to estimate the risks we are taking within our portfolios.”
Five months earlier…
Borneo, Indonesia, September 2022. After an eight-hour drive over rough terrain and some snatched sleep on the floor of a spartan accommodation block, Fidelity analyst Minlin Lee awakes to the sound of gibbons calling. It’s an apt reminder of the reasons for this trip. Minlin has secured permission from a palm oil producer through her coverage of the company as an analyst to conduct a pilot study on its land, comparing the bioacoustics of production plots on which it plants its crop with both the conservation areas it manages and a control plot outside its concession.
“Biodiversity is increasingly an important topic of discussion for the companies I cover,” she explains. “Especially when it comes to palm oil plantations.”
A few hours later, Minlin is squelching through the jungle mud, boots cracking twigs, following the research team under low-hanging boughs and over makeshift log bridges. They are heading into the forest to a test site to check on microphones placed the previous day. As they walk through the trees, researcher Noreen Blaukat explains the concept behind bioacoustics.
“Sound is used by many animal groups,” says Noreen. “We can use that as a proxy for biodiversity levels.”
“How does it compare to other monitoring methods?”
“Bioacoustics is non-invasive. You just leave the recording device in place, so you don’t need to have people walking around in the forest and potentially disturbing wildlife. You can also use it for large areas and long time periods and get insights over different times of the day or different seasons.”
It is this scalability that makes bioacoustics a potential game changer. Current methods for measuring biodiversity can be highly labour intensive and time consuming, often requiring experts to physically count how many different species they see and how many of each species. The result is a trickle of data when the world needs a torrent.
The team arrives at the test site.
“It’s not so bad here,” says Patrick McLean, the chief technology officer. “The first control plot was horrible. Lots of ants.”
“Patrick had one in his shoe!”
“And they bite,” Patrick confirms. “They bite hard.”
Strapped to the base of a tree is a black plastic box, around 20cm across, from which several wires snake out across the jungle floor to two tripods, one on either edge of the 20-metre-wide recording site. Each tripod holds a pair of microphones, one close to the ground, the other higher up.
“The idea is to capture different elements of the soundscape,” explains Noreen.
Patrick opens the box and carefully removes the recording device and its sound card. Every movement is measured, deliberate, precise, like defusing a bomb.
Nearby, a colleague is wrapping a tape measure round a tree trunk.
“One of the things that’s important to us is to get an assessment of the density of vegetation immediately around the microphones,” says Patrick.
That includes identifying all trees wider than 10cm in diameter, as well as taking video and photos of the site, all of which will enable the team to assess the effects of sound absorption. The height of the canopy also affects the number of birds or bats the microphones are likely to pick up. The team also takes temperature and humidity readings. The better they understand the differences between plots, the better they can account for them in their analysis.
“We started yesterday at 10.16,” she says, pointing to the first recording. “The last file is when we arrived, so everything is there.”
The recording equipment appears to be in good working order. That’s more than Fidelity’s videographer KJ can say about his camera, which is struggling in the tropical conditions.
Satisfied, the team heads off to check the next site. There are ten test sites in total, with four microphones on each. In total, they will collect 276 hours of recordings over a six-day period, covering conservation areas, productions plots, and a control area. Ideally the control area would be a primary forest. However, as these were all cleared in the 1980s, the control for this study is secondary forest that has not been logged in the past 10 years and, unlike the conservation areas, is not monitored by the palm oil company.
Aix-en-Provence, France, February 2023. Back in the Green PRAXIS offices, Patrick sits down with Fidelity sustainable investing analyst Charlotte Apps to share the team’s research. Charlotte starts by asking about the obvious challenge:
“You have a lot of data. How do you get it all in a single place?”
To learn more about bioacoustics and read the full article click here: Wild for sound: how new research is plugging biodiversity’s data deficit (fidelity.be)
This document is for Investment Professionals only and should not be relied on by private investors.
This document is provided for information purposes only and is intended only for the person or entity to which it is sent. It must not be reproduced or circulated to any other party without prior permission of Fidelity.
This document does not constitute a distribution, an offer or solicitation to engage the investment management services of Fidelity, or an offer to buy or sell or the solicitation of any offer to buy or sell any securities in any jurisdiction or country where such distribution or offer is not authorised or would be contrary to local laws or regulations. Fidelity makes no representations that the contents are appropriate for use in all locations or that the transactions or services discussed are available or appropriate for sale or use in all jurisdictions or countries or by all investors or counterparties.
This communication is not directed at, and must not be acted on by persons inside the United States and is otherwise only directed at persons residing in jurisdictions where the relevant funds are authorised for distribution or where no such authorisation is required. In China, Fidelity China refers to FIL Fund Management (China) Company Limited. Investment involves risks. Business separation mechanism is conducted between Fidelity China and the shareholders. The shareholders do not directly participate in investment and operation of fund property. Past performance is not a reliable indicator of future results, nor the guarantee for the performance of the portfolio managed by Fidelity China. All persons and entities accessing the information do so on their own initiative and are responsible for compliance with applicable local laws and regulations and should consult their professional advisers.
Reference in this document to specific securities should not be interpreted as a recommendation to buy or sell these securities, but is included for the purposes of illustration only. Investors should also note that the views expressed may no longer be current and may have already been acted upon by Fidelity. The research and analysis used in this documentation is gathered by Fidelity for its use as an investment manager and may have already been acted upon for its own purposes. This material was created by Fidelity International.
Past performance is not a reliable indicator of future results.
This document may contain materials from third-parties which are supplied by companies that are not affiliated with any Fidelity entity (Third-Party Content). Fidelity has not been involved in the preparation, adoption or editing of such third-party materials and does not explicitly or implicitly endorse or approve such content.
Fidelity International refers to the group of companies which form the global investment management organization that provides products and services in designated jurisdictions outside of North America Fidelity, Fidelity International, the Fidelity International logo and F symbol are trademarks of FIL Limited. Fidelity only offers information on products and services and does not provide investment advice based on individual circumstances.
Issued in Europe: Issued by FIL Investments International (FCA registered number 122170) a firm authorised and regulated by the Financial Conduct Authority, FIL (Luxembourg) S.A., authorised and supervised by the CSSF (Commission de Surveillance du Secteur Financier) and FIL Investment Switzerland AG. For German wholesale clients issued by FIL Investment Services GmbH, Kastanienhöhe 1, 61476 Kronberg im Taunus. For German Institutional clients issued by FIL (Luxembourg) S.A., 2a, rue Albert Borschette BP 2174 L-1021 Luxembourg.
Issued in France by FIL Gestion (authorised and supervised by the AMF, Autorité des Marchés Financiers) N°GP03-004, 21 Avenue Kléber, 75016 Paris.
In Hong Kong, this document is issued by FIL Investment Management (Hong Kong) Limited and it has not been reviewed by the Securities and Future Commission. FIL Investment Management (Singapore) Limited (Co. Reg. No: 199006300E) is the legal representative of Fidelity International in Singapore. FIL Asset Management (Korea) Limited is the legal representative of Fidelity International in Korea. In Taiwan, Independently operated by FIL Securities (Taiwan ) Limited, 11F, 68 Zhongxiao East Road., Section 5, Xinyi Dist., Taipei City, Taiwan 11065, R.O.C Customer Service Number: 0800-00-9911#2 .
Brunei, Indonesia, Malaysia, Philippines and Thailand: For information purposes only. Neither FIL Limited nor any member within the Fidelity Group is licensed to carry out fund management activities in Brunei, Indonesia, Malaysia, Thailand and Philippines.
Issued in Australia by Fidelity Responsible Entity (Australia) Limited ABN 33 148 059 009, AFSL No. 409340 (“Fidelity Australia”). This material has not been prepared specifically for Australian investors and may contain information which is not prepared in accordance with Australian law.
ED23 - 120