Brunel Pension Partnership, one of the UK’s local government pension pools, is teaming up with ESG data provider S&P Trucost on a pilot biodiversity footprinting exercise.
The move was revealed in the £35 billion ($42 billion; €39 billion) scheme’s new climate change policy, published on Wednesday.
Details of the partnership were not included in the policy. However, last month S&P Global announced the launch of a “knowledge community”, in which “investment managers, insurers, businesses, non-profits and others” would be invited to “collaborate on ways to further develop the methodology to accelerate the shift of capital towards nature-positive outcomes”.
The aim of the pilot, S&P Global said, was to support the practical implementation of the Taskforce on Nature Related Disclosures (TNFD) framework, including by using “geospatial biodiversity datasets curated by the UN Environment Programme World Conservation Monitoring Centre (UNEP-WCMC)”.
Following the mapping of its biodiversity impacts, Brunel said it plans to “engage with those companies in our selected portfolios who are either a) causing most impact, or b) most at risk from deteriorating ecosystem services”.
Brunel’s new climate policy, which builds on one published by the scheme in 2020, was developed following a one-year stock-take overseen by UK advisor Chronos Sustainability.
Biodiversity has become an area of increasing focus for the responsible investment community.
In June, the Partnership for Biodiversity Accounting Financials (PBAF) published a new standard for financial institutions to measure the impact of loans and investments on biodiversity.
Brunel identified biodiversity as new priority under its responsible investment mandate in May, including it as a focus area for stewardship alongside longer-standing concerns such as climate change and the circular economy.
A spokesperson for Brunel told Responsible Investor that the pilot with S&P Trucost has already begun. The results are expected to be published in the pool’s outcomes and stewardship report later this year.
In its updated policy, Brunel also revealed that it would target water companies on biodiversity impacts, as well as assessing their performance on “social issues, lobbying and climate resilience, including storm water releases, wastewater discharge and shortages”.
The UK’s Environment Agency is one of the 10 funds that invest through Brunel.
Brunel also said it will engage with all its investment managers and general partners on “measuring emissions, disclosure levels and setting targets for decarbonisation and alignment by June 2024”.
The role of investment benchmarks in “driving investment decisions and in constraining our ability to invest in areas that make a meaningful contribution to climate change mitigation and adaptation” is another focus for the scheme, it revealed.
UK-based environmental data firm Trucost was acquired by S&P Dow Jones S&P Indices for just over £14 million in 2016.