Investor initiative announces focus list of companies “systematically important” to reverse nature and biodiversity loss.
Global investor initiative Nature Action 100 (NA100) has entered its engagement phase, sending letters to focus list companies calling for “urgent and necessary action” to protect and restore nature and to mitigate financial risks.
NA100 has named the 100 companies – which collectively have a market capitalisation of more than US$9 trillion – it will prioritise in key sectors to tackle the major drivers of nature loss caused by corporates.
The focus sectors include biotechnology and pharmaceuticals, chemicals, food, forestry and paper, and metals and mining.
Peter Taylor, Corporate Programme Director at the Institutional Investors Group on Climate Change (IIGCC), told ESG Investor that these sectors are “major drivers of nature loss due to their large impacts on habitat loss, overexploitation of resources, and soil, water, and solid waste pollution”.
“The letters sent by investor participants to 100 companies outline these expectations and encourage urgent action to help reverse nature loss,” he added.
The objective of the NA100 is to increase corporate “ambition and action” in eight key sectors that it has deemed to be “systemically important in reversing nature and biodiversity loss by 2030” and have a heavy dependence on ecosystem services to function.
The NA100’s Secretariat and Corporate Engagement Working Group is co-led by the IIGCC and investor network Ceres, while the initiative’s Technical Advisory Group is co-led by collaborative investor initiative the Finance for Biodiversity Foundation and NGO think tank Planet Tracker.
NA100 member signatories collectively manage approximately US$23.6 trillion in AUM.
Companies in the crosshairs
Firms selected for engagement by NA100 include mining giants Glencore, Vale, Rio Tinto and BHP, as well as retail and consumer goods giants like Amazon, Danone, Johnson & Johnson, and Nestle.
The 190-member strong initiative, informally announced in the first half of last year, includes AXA Investment Managers, Columbia Threadneedle Investments, BNP Paribas Asset Management, Church Commissioners for England and Storebrand Asset Management.
NA100 defines nature as the natural ecosystems and biodiversity that are vital to sustaining businesses and livelihoods.
“Through this lens, the initiative will focus on companies in those 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,” said Taylor.
The initiative’s Investor Expectations for Companies outlined actions that investors can encourage companies to take, covering ambition, assessment, targets, implementation, governance, and engagement.
NA100 expects companies to assess and report on their nature-related dependencies, impacts, risks, and opportunities throughout value chains; set and disclose science-based targets; engage with indigenous peoples and local communities when affected on targets; and establish board oversight and disclose management’s role in assessing nature-related information.
“Investor participants can engage with companies by signing letters or participating in engagement teams where they will take forward tailored engagements with individual companies”, Taylor added.
“Most investors have chosen to do both.”
Nurturing nature action
Taylor said that the NA100’s immediate priority is to gather the responses from the 100 companies that have received a letter. Following this, it will be for investors to “independently decide their engagement strategy and approach”.
“Ensuring the engagements get off to the most positive and impactful start is really the priority for the foreseeable future,” he added.
“It has taken many different stakeholders a lot of effort and time to get to where we are today, Taylor said. “The start of engagement with the sending of letters to 100 companies is a significant and important milestone. We are delighted to get going.”
Emine Isciel, Head of Climate and Environment at Storebrand Asset Management, previously told ESG Investor that measuring NA100’s progress would be comparatively more difficult than for climate action, and that it would be guided by structures such as the Science Based Targets Network and Taskforce on Nature-related Financial Disclosures (TNFD).
Earlier this month, the TNFD published its final recommendations for nature-related risk management and disclosure, which will serve as a tool to “operationalise” the achievement of Target 15 of the Kunming-Montreal Global Biodiversity Framework.
The TNFD is also developing a global nature-related public data facility that aims to aid investors and companies that are struggling to access “reliable and comparable” nature-related data.
Investors have previously stressed that collaborative action through the NA100 is pivotal to effectively address the systemic risk of biodiversity loss. The NA100 is the nature-focused counterpart to investor-led engagement initiative Climate Action 100+.