Investors respond to draft biodiversity targets ahead of COP15

Asset managers welcome document, but ask for more clarity on their role

Investors have praised a new draft Global Biodiversity Framework that includes targets for financial institutions and companies. 

The UN Convention on Biological Diversity (CBD) Secretariat has released the first official outline of the Framework, which will be presented at October’s Conference of the Parties to the Convention on Biological Diversity (COP15) in China. 

Andrew Mitchell, founder of non-profit groups Global Canopy and the Natural Capital Finance Alliance, told RI: "What we need is a kind of Paris Agreement for nature – that's what the Convention on Biological Diversity is trying to deliver, but it is hard in the absence of a currency like a tonne of CO2, and a target like 2 degrees.”

The draft identifies 21 targets and 10 goals to help meet the UN’s objective of “living in harmony with nature” by 2050, including a proposal that businesses disclose their dependencies and impacts on biodiversity. It also suggests ensuring that all activities and financial flows are aligned with biodiversity values.

Arjan Ruijs, Senior Responsible Investment Officer at Dutch investment house Actiam, said that the new targets were clearer than the previous iteration, known as the Aïchi targets, which ran from 2011 and 2020.

 “Compared to the Aïchi targets, the new text is more concrete on a number of points and clearer about the end and intermediate targets,” he told RI. 

Investors and banks have shown an increasing interest in addressing biodiversity alongside climate change in their sustainable finance strategies. Last month, the Taskforce on Nature-related Financial Disclosures was launched to parallel influential work done by the Taskforce on Climate-related Financial Disclosures. There are also plans to launch a Nature 100+ initiative to coordinate shareholder engagement with companies on biodiversity in a similar way to Climate Action 100+. 

Speaking on behalf of the Partnership for Biodiversity Accounting Financials (PBAF), a membership body developing ways to measure how lending and investments impact nature, Wijnand Broer called for financial institutions to be “explicitly mentioned” in the text “to emphasise the fact that it is not only the producers and manufacturers that should assess their impacts and dependencies on biodiversity and ecosystem services, but also financial institutions.”

“The financial sector can play a key role in changing the game when dependencies, impacts and related financial risks become clear”, he added.

Jan Erik Saugestad, CEO of Storebrand Asset Management, said that the current lack of standardised, credible biodiversity metrics made it “important that the final biodiversity framework make an explicit reference to the TNFD, which aims to provide a standardised and integrated approach to the disclosures of nature risks and opportunities.”

Peter van der Werf, Senior Engagement Specialist at Dutch asset manager Robeco, welcomed the report as a “major milestone”, but added that he hoped “the involvement of the financial sector can be further clarified” during October’s negotiations. 

Meanwhile, an investor group criticising a controversial Brazilian land regularisation law has added more members today. European investors including Legal & General Investment Management, EdenTree Investment Management, Swedbank Robur Fonder, KLP Kapitalforvaltning and Swedish pension fund AP7 have been joined by DNB Asset Management in opposing PL 2633/2020 – a bill they say will “encourage further land grabbing and widespread deforestation which would jeopardise the survival of the Amazon and meeting the targets of the Paris Agreement”.

Corporate members of the coalition include Tesco, Sainsbury’s, Marks & Spencer, Nando’s and Ocado. It claims that last night, Brazil’s Congress voted to bypass the standard legislative review process to urgently bring forward a vote today on.

A spokesperson for the coalition said the bill is “expected to sail through with minimal opposition.”

In May of this year, RI reported how most of the investor signatories wrote a letter raising concerns about a similar bill.

Today’s statement comes as the think-tank Planet Tracker and the London School of Economics’ Grantham Research Institute called on Brazil to issue a sovereign bond “tying interest payments to its success in reducing deforestation”.