Research firm EIRIS has put forward five recommendations to enable investors to help them address failings by corporations on biodiversity.
It suggests investors understand, be aware of, encourage, engage and collaborate on the issue.
“Investors should take steps to understand the systemic risk that biodiversity loss represents to their investments,” EIRIS states in a new report COP Out? Biodiversity loss and the risk to investors. And it suggests they should be aware of unmanaged risk in the supply chain, relating to companies in medium-impact sectors.
It also advises investors to encourage businesses to commit to upholding the principles of 1992’s Convention for Biological Diversity.
“Use engagement channels to demand that businesses participate in voluntary stewardship schemes,” EIRIS says, adding: “Such initiatives areclosely linked to ‘best in sector’ performance in certain sectors.”
Lastly, it advises collaboration with other investors “for maximum effect”. It names nine biodiversity leaders: Fraport, Holmen, International Paper, Severn Trent Water, Skanska Construction, Teck Resources, Unilever, United Utilities and UPM-Kymmene.
Generally, the report finds the level of understanding of biodiversity-related activities “is being largely disregarded by the business community”.
The new research finds that leading large-cap companies in high-impact sectors demonstrate better performance in terms of policies, plans and intentions on biodiversity – but medium-impact sectors lag.
EIRIS analysed the biodiversity policies of around 1,800 publicly-listed companies within the FTSE All-World Development (AWD) Index – with “very few” rated as having good biodiversity policy assessments.