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Science-Based Targets Helping Investors to Tackle Biodiversity Risks

Nature-related data sourcing possible via client partnerships and public databases.

Despite current numerous barriers, investors can take meaningful action to tackle biodiversity risks, according to panellists at a webinar organised by the Principles for Responsible Investment and UN Environment Progamme Finance Initiative.

“There is a lot we can do here and now to do no more harm,” said Helen Crowley, Head of Sustainable Sourcing Innovation at French luxury goods company Kering.

Given the urgent need to halt biodiversity destruction, Crowley said firms should not wait to act while frameworks for monitoring and measuring impact mature.

“As companies and investors, we need to start figuring out [our company’s] drivers of nature loss, and reduce those,” she said.

Thirty-seven financial institutions have signed a pledge to collaborate, engage, assess their own impact, set targets and report publicly on biodiversity by 2024 at the latest.

Bouke de Vries, Climate Program Lead and Advisor to the Board on Public Affairs at Rabobank, one of the signatories, said reaching targets depended partly on partnerships with clients to obtain data to assess biodiversity risks in their portfolios.

“It’s very valuable to know from our clients; what is their own performance, what are their targets,” de Vries explained.

“We also ask, together with banking associations, the European Commission to set up a single access point for sustainability data,” he added, saying the proposal is under consideration.

According to Crowley, Kering is using a framework developed by the Science Based Targets Network (SBTN) to set up its biodiversity strategy, which allowed it to prioritise action and set targets.

“Ultimately, you have to know where does your business touch nature. But in the meantime, there are plenty of shortcuts you can take to hotspot analysis,” she added, noting that land use conversion, forest usage and water pollution are common areas of focus.

Chris Weber, Technical Director at the SBTN, acknowledged that while targets are still under development, in certain areas – such as deforestation, resource exploitation of water, climate change and ecosystems for agricultural land – they are sufficiently progressed for companies to use.

Annick Paradis, Executive Director at Pollination Group, a specialist climate change advisory and investment firm, said investors would need both “macro data” such as supply chain data and “micro data” at asset level to assess risks and opportunities of investments.

Paradis also pointed to the importance of redefining biodiversity risk and value in order to price these into investment processes and deliver actionable targets.

SBTN is working to further refine its targets through a co-creation programme which is open to companies.

A Taskforce on Nature-related Financial Disclosures (TNFD) will be established as a partnership between Global Canopy, the United Nations Development Programme, the UNEP FI, and the World Wide Fund for Nature to provide a framework for financial institutions and corporates to assess, manage and report on their dependencies and impacts on nature.

Immediate action on biodiversity can “significantly reduce extinction rates of endemic species”, according to a report jointly published today by the Natural History Museum and Vivid Economics. The report, titled ‘The Urgency of Biodiversity Action’, was submitted as evidence to the recently published Dasgupta Review.

Among its recommendations is a call for governments to announce the future ambition and likely level of biodiversity incentives, and translate these into investor-relevant scenarios.

“Substantial incentives will be needed to bring about and maintain reforestation and associated biodiversity and carbon outcomes, through regulation and economic incentives,” it said.

Without greater action than currently implemented policies, more endemic species will go extinct in the coming 30 years than appear to have died out in the entire period 850-1850 CE, the report warned.

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