Industry

Investor Group to Sketch Details of Nature-focused Engagements

Nature Action 100 to soft launch at COP15 ahead of collaborative campaign to reduce biodiversity loss.

Key details of a new collaborative investor initiative focused on engaging with major corporates over their impact on nature will be disclosed in the next few days.

Nature Action 100, which will undertake corporate engagement activities coordinated by advocacy group Ceres and the investor network the Institutional Investors Group on Climate Change (IIGCC), is planning a “soft launch” at the UN Convention on Biological Diversity’s COP 15 summit in Montreal on 11 December.

But before then, more information is to be published, giving interested parties a clearer idea of what is planned. The initiative has been established to facilitate structured engagement between institutional investors and companies with high levels of nature-related impacts and risks, along similar lines to how members of Climate Action 100+ have engaged with the world’s most carbon-intensive firms.

“We are looking at the decline of nature biodiversity,” said Julie Nash, Senior Programme Director for Food and Forests at Ceres. “Nature Action 100 is engaging with clients in their portfolios. Signatories will be engaging with companies in terms of their impact on nature.

“The long-term objective is to protect and restore nature. We will work with investors to track the progress of those companies.”

According to recent statement confirming Nature Action 100’s structure and initial plans: “The initiative aims to drive greater corporate ambition and action on tackling nature loss and biodiversity decline. Investors will focus on companies in key sectors with the largest impacts and dependencies on nature to ensure they are taking timely and necessary actions to protect and restore nature and ecosystems.”

Ceres and IIGCC will run Nature Action 100’s secretariat as well as its corporate engagement workstream. The group has also appointed a technical advisory group, to be jointly led by the Finance for Diversity Foundation and the think tank Planet Tracker.

The secretariat will set up the initiative’s steering group and supporting administrative, communications and fundraising activities. The corporate engagement work stream will focus on developing a multi-year engagement plan to engage companies deemed most important to stemming nature and biodiversity loss, while the technical advisory group will identify priority engagements and “develop science-based investor guidance and tools”.

Investor engagement with investee corporates on their nature-related risks and impacts has grown rapidly in recent years, partly due to an increased awareness of the impact of biodiversity loss on climate change, but also because of the many other risks to humans posed by loss of natural habitats and associated ecosystem services.

Investor impetus

COP15 is expected to provide further impetus to engagement by investors on nature-related issues because it should see the completion and signing of a new Global Biodiversity Framework to protect and support nature. Not only will the framework increase conservation – including a pledge to ringfence 30% of the world’s surface by 2030 – it will also require the alignment of public and private finance with its goals, and the disclosure of nature-related risks by companies and investors.

Other private sector initiatives focused on addressing biodiversity risks include the Capitals Coalition, a grouping of 400 organisations is pushing for natural capital, social capital and human capital to be incorporated into business decision-making by 2030, and NatureFinance, a non-profit organisation that works “to align global finance with nature positive outcomes”.

In October last year, the World Bank warned: “In some countries where GDP growth is achieved by consuming or degrading natural resources, for example by over-fishing or soil-degradation, total wealth is declining. Put another way, countries that have seen declining total wealth per capita were often those that were also degrading their renewable natural assets. “

Looking ahead, Nash said: “Water and de-forestation have been foremost in our minds for some years. A number of investors will come to the COP in Montreal, where we are holding our soft launch, to talk about what they can do. Our main launch will be in the late winter, early spring.”

Earlier, this year, investors involved in the early stages of Nature Action 100 told ESG Investor that the initiative would conduct “robust dialogue” with systemically important corporates.

The launch investors for Nature Action 100 were AXA Investment Managers, Columbia Threadneedle Investments, BNP Paribas Asset Management, Church Commissioners for England, Domini Impact Investments, Federated Hermes Limited, Karner Blue Capital, Robeco, Storebrand Asset Management, Christian Brothers Investment Services, and Vancity Investment Management.

“Nature protection is a challenge that needs to be addressed to preserve the existence of our societies and global economies. Companies and investors must integrate nature and biodiversity considerations in their research, engagement and investment processes. Dialogue between companies and investors then becomes fundamental to drive a coordinated collective action,” said Liudmila Strakodonskaya, Responsible Investment Analyst at AXA Investment Managers.

“With this initiative, we hope to bring change by encouraging corporates, investors and policy makers to take robust and timely actions to address this global challenge.”

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