Over the past 18 months, biodiversity has jumped up the agenda for financial institutions. With new regulation on the horizon and the Taskforce on Nature-related Financial Disclosures (TNFD) launching in September, banks and asset managers are racing to understand their impact and dependencies on the natural world.
This new focus has prompted a wave of recruitment. Ian Povey-Hall, global head of sustainable finance and impact investing at recruitment consultancy Acre, tells Responsible Investor that asset managers, insurers and banks are all looking to get technical expertise on nature.
For Katie Leach, head of nature at Lloyds Banking Group, this reflects the fact that institutions understand the critical role they must play in tackling climate change and the loss of nature.
“As the scope of nature-related work has become clear, there has been a realisation that nature needs specific technical expertise rather than recruiting from existing people working in similar teams,” she says.
She also notes that several of these new roles – including her own – are at a senior level. “It shows how serious organisations are about dedicating resources to nature and demonstrates the importance placed on setting the right strategy in this area,” she says.
Oliver Withers, who became Standard Chartered’s first head of biodiversity in March, adds that the seniority of these roles shows the realisation by financial firms of the need to take strategic approaches “and not just react to the market”, as well as a recognition that policy on nature is coming.
According to Povey-Hall, these new roles – which usually report into the head of sustainability or sustainable investing – tend to be focused on regulatory oversight, due diligence on transactions, and corporate communications and strategy.
This chimes with Withers’s description of his remit, which involves looking both at how the bank can appropriately manage risk and how it can deploy more capital to nature.
Similarly at Lloyds, Leach and her team – which is recruiting for three additional roles – are focused on developing the group’s strategic position on nature, including TNFD reporting, and embedding nature across the group, including in the retail, commercial and insurance businesses.
More broadly, Withers says a key aspect of his role – and that of other heads of nature – is to be a “translator”.
“We’ve seen a real ramp-up in academic and scientific research into the value of biodiversity to the economic system,” he says. “We need to be the ones to improve that feedback loop between these players and financial institutions. And with that improved loop we can use the information to inform our decision-making.”
Lester Lockyer, managing director of recruitment consultant Allen & York, agrees that heads of nature serve as translators, given the range of specialist expertise at various organisations. “It’s a particular dialect that needs someone to translate it.”
In terms of the type of organisations hiring for senior nature roles, Povey-Hall says the main interest is currently coming from banks and private markets, particularly real assets portfolios. “They are doing more on these nature-based deals and transactions,” he says.
This is reflected in the most senior of the recent appointments. In June, Lombard Odier Investment Managers (LOIM) named Marc Palahi as its first chief nature officer in June. In his C-suite role, Palahi will be responsible for developing a nature strategy for the Swiss manager’s sustainable investment unit, holistiQ Investment Partners.
Apart from their remits, what the new generation of senior nature hires have in common is their background. Palahi, Leach and Withers have all spent a chunk of their careers outside finance.
A specialist in forests, the circular bioeconomy and climate change, Palahi joined LOIM from the European Forest Institute, where he had worked for 16 years and served as director for eight.
Before joining Lloyds, Leach led ShareAction’s biodiversity programme. That followed a stint at UNEP-WCMC, where she led work on natural capital and corporate biodiversity measurement.
Withers’s most recent role was at Credit Suisse, where he was also the first to hold the title of head of biodiversity. Prior to that, however, he spent nearly five years at the Zoological Society of London as head of conservation finance and enterprise.
Povey-Hall confirms that successful applicants for heads of nature roles are likely to have gained their subject knowledge through work at an NGO, the public sector, a philanthropic group/think tank, a specialist consultancy or SME corporate.
As Lockyer notes, this means that the pool of potential candidates is very small. “You’re talking about very particular skills and knowledge which sits in a pool [ESG] which is already quite small,” he says.
‘Outcomes versus optics’
Looking ahead, recruiters predict that the trend for hiring nature specialists will continue. Povey-Hall says that in 18 months it will be “commonplace” for banks, insurers and asset managers to have someone focused on nature in sustainability teams.
What level of seniority that will involve remains to be seen. Lockyer agrees that more organisations may look to appoint heads of nature. He adds, however: “They are not going to be mass market roles, and it’s not going to be comparable in number to the broader ESG hiring we’ve previously seen.”
Asked if there is a concern that these roles may end up being just for show given how nature is a “trendy” topic at the moment, Povey-Hall said that, as always, the proof is in the outcomes versus the optics.
“It is key that there is accountability from stakeholders/shareholders following up beyond the halo of the press release to see what impact these roles actually have in the following one, three, five years after they are hired,” he says.
He adds that a key indicator will be how long people stay in their role.
Withers agrees that heads of nature roles need to be integrated and commercial, and not for show. “It’s not enough to have ‘heads of nature’,” he says. “You need that broader enabling environment so that people in these roles can proactively pursue the issue.”