The Principles for Responsible Investment (PRI) has named target firms and signatory endorsers for its nature engagement initiative.
Launched at PRI in Person in Tokyo last year, Spring will see investors engage 40 companies on their impacts and dependencies on nature through their business operations, supply chains and engagement with policymakers.
The initiative – which is expected to run for a minimum of five years – will initially focus specifically on forest loss and land degradation, but later this year plans to explore covering other drivers of biodiversity loss.
According to PRI, Spring is currently endorsed by 129 of the network’s signatories including prominent nature heavyweights like Storebrand, EOS at Federated Hermes and Iceberg Data Lab. Twenty-five percent of the signatories are asset owners.
On geographical spread, Europe easily takes the top spot with 61 endorsers. Coming in second is the UK and Ireland with 28, and then North America and Asia, with 15 each.
PRI signatories can now apply to be active participants in engagements with companies. The deadline to apply is April 19.
Tim Steinweg, head of stewardship – nature at PRI, told Responsible Investor that the aim is to “fully launch Spring” and its engagement teams in mid-2024. Teams will consist of lead and support investors, usually with four to six participants.
Spring was launched shortly after Nature Action 100, another collective engagement initiative, named its target firms and investor signatories.
Forty-five investors involved in NA100 are also participating in Spring, including Storebrand, EOS at Federated Hermes, Scottish Widows, Sumitomo Mitsui Trust Asset Management and Generali.
Notable names that have signed up to Spring and not Nature Action 100 include BMO Global Asset Management, Mirova, Old Mutual Investment Group and Nippon Life Insurance Company.
Spring’s 40 target companies include household names such as Santander Group, BMW, L’Oreal and Bunge.
In terms of sector, food/agriculture/consumer goods make up the largest group, with 16 companies, followed by mining/refining, with eight. There are also seven automotive targets, five financial ones, three from chemicals/pesticides, and one oil and gas name.
Geographically, Brazil takes the top spot with nine firms, followed by Germany with six.
Four of the firms – BTG Pactual, Bunge, JDE Peet’s and Reckitt – are among the 320 organisations who have signed up as “early adopters” of the Taskforce on Nature-related Financial Disclosures.
Only five firms appear on the target lists for both NA100 and Spring: BASF, Bayer, Archer-Daniels-Midland, China Mengniu Dairy and L’Oreal.
According to the PRI’s website, in the cases of overlap with NA100 and Climate Action 100+, Spring will develop an engagement strategy “that seeks to optimise additionality and avoid duplication or conflicting messages”.
“This may result in a greater emphasis on a company’s political engagement practices or on nature-related risks in a company’s supply chain, as appropriate,” it added.
Company selection was developed in partnership with consultancies Canbury Insights and Acrux Partners through a three-phase approach.
Phase one aimed to identify priority geographies facing high risk of future forest loss and land degradation, where interventions “may have the highest potential of real-world impacts”, and markets where PRI members tend to have exposure.
Argentina, Bolivia, Brazil, Indonesia and Paraguay were subsequently selected.
Phase two looked at the policy processes shaping the dynamics of forest loss and land degradation in priority geographies.
“We took a value-chain approach to find the most relevant and important policy processes,” Steinweg told RI. “Those selected are a mix of regulations in the five countries, as well as in demand-side nations like the EU, China and India, and broader international trade and investment agreements.”
Finally, phase three aimed to identify the most influential corporate voices in the highlighted policy arenas.
Reflecting on the final target list, Steinweg said: “Through our sector-agnostic methodology, we managed to identify influential companies that have not been engaged much on forest loss and land degradation to date.
“For example, these include companies that produce or source transition minerals, with growing demand posing a substantial future treat for tropical forests.”
He added that the reason for focusing on just 40 firms initially was to ensure that the network has enough capacity to support the engagements. “We expect the second release later this year will bring the number up to 80 firms selected from the pool that Canbury created.”
Engagement teams are set to be created between three and six months after the release of the company names.
Asked how progress will be monitored, Steinweg said the PRI will develop an assessment framework, but has not decided whether to make a new benchmark “as we appreciate there are already nature benchmarks regarding corporates out there”.
RI reported this week that Nature Action 100 has a request for proposals out for a consultant to analyse the initiative’s target companies against its benchmark.
Currently in its draft phase, the purpose of the benchmark is to assess the performance of companies against the initiative’s investor expectations. It consists of six indicators, 17 sub-indicators and 58 metrics.