Earlier this week, Responsible Investor revealed that Nature Action 100 had formed the initial investor engagement teams for its target companies. 

RI has reached out to the initiative’s 205 participants to ask for details of their participation, including the type and names of firms they will be engaging. 

Seventy-two gave an exact or approximate figure for the number of firms they have been assigned. 

Almost 30 participants – including EOS at Federated Hermes, HESTA, Storebrand Asset Management, Lombard Odier Investment Management (LOIM) and KLP Asset Management – provided the names of companies they will engage under the initiative (see table at the end of the article).

Of the group, EOS has the longest list with nine assigned firms including JBS, Kellogg’s, Vale and Bayer. 

Whether or not investors should name which companies they are engaging as part of sustainability initiatives has long been a point of debate in the industry.

As RI reported earlier this week, NA100 is “not currently disclosing the make-up of engagement teams”, according to a spokesperson.

NA100’s climate counterpart – Climate Action 100+ – recently began publishing the names of the investors leading some of its engagements on its website after committing to do so in its second phase. However, this is not a mandatory obligation of the initiative and investors can voluntarily opt in.

Sonya Likhtman, associate director of engagement at EOS at Federated Hermes, told RI: “Our priority is effective stewardship and engagement outcomes, focused on making headway with halting and reversing biodiversity loss in this decade. Disclosing our target companies for the Nature Action 100 initiative is about enabling transparency around this.”

Echoing her, Arild Skedsmo, senior analyst, responsible investments at KLP, said: “KLP generally tries to be as open and transparent on our ownership engagement as possible. We talk to many companies on big and small issues and are not trying to make any secret of who we talk to – on the contrary, we encourage others to do the same.” 

Representatives from Storebrand, LOIM and PGGM also stressed transparency as the reason for disclosing the names of their engagement targets.

Quality over quantity

When it comes to the number of firms investors have been assigned, most of the 72 respondents said they will be involved with less than five. Seventeen are engaging five or more firms, and only three respondents said they will be involved in 10 or more. 

Among the cohort of investors with a larger number of assigned corporates are: Generali Group (14), Green Century Capital Management (12), As You Sow (“approximately 10”), Irish Life Investment Managers (seven), Candriam (seven), AXA IM (six), Achmea IM (six), MN (six) and Boston Common AM (six). 

The preference for focusing on a smaller number of targets is in line with previous feedback. When RI surveyed NA100 investors in October about the number of firms they had put themselves forward for, 40 of the 53 respondents said between one and 10 companies.  

Reasons given for this included ensuring the ability to conduct quality engagements, as well as engagement capacity and/or resource allocation.   

In terms of selecting specific companies, the most common reason cited by respondents was that they had previously engaged with the firms on nature-related or broader ESG topics, including climate change.

A spokesperson for LGT Capital Partners told RI: “We believe it is key to have a targeted engagement approach where we can efficiently allocate resources, strategically influence companies and build expertise.

“For the NA100 initiative, we applied for engagement groups with companies that we already have an established dialogue with, to ensure deeper and more effective engagement that can lead to meaningful impact.”

A spokesperson for M&G said: “We see our nature work as an extension to our climate work, so we will continue our role as co-leads on Rio Tinto, BASF and UPM from CA100+ and the Net Zero Engagement Initiative into NA100.” 

Notably, nine respondents said they are not assigned to any firm. Reasons for this included capacity issues, as well as not holding any of the focus companies. 

For example, a spokesperson for Finland-based Veritas Pension Insurance told RI: “We publicly support NA100 as well as its goals and objectives, but do not participate directly in engagements with focus companies because of constraints in resources. We take part in NA100 as a ‘co-signing investor’, meaning we sign annual letters that set forth the expectations of the initiative.” 

Meanwhile, one US investor said its future participation in the initiative is “currently up in the air due to staffing/capacity changes”. 

Sectoral and geographic spread

Looking at the sectors of assigned firms, 60 investors provided information. 

Of the eight priority sectors identified by NA100, investors who responded to RI‘s survey were fairly evenly spread across them – although “household and personal goods” received slightly less attention. However, it is the smallest sector group, comprising just seven companies. 

Mariët Druif, responsible investment officer at Cardano, said the manager was particularly pleased to be assigned chemical companies. “The sector often receives less attention compared to others, but it has a significant impact on the environment, including soil contamination, water pollution and carbon emissions,” she told RI. 

On the geography of assigned firms, 56 investors have provided information. 

European and North American firms dominate, with 49 investors saying they have been assigned firms in North America and 41 in Europe. Asia comes third with 12, followed by South America with five and Oceania with four. 

On a country-specific level, the US stood out, being flagged by 31 investors. This is unsurprising given that 45 of the NA100 target companies are located in North America. 

The importance of the location of firms was mentioned by several respondents.

Some flagged the value of being based in the same region as a target company. For example, Storebrand Asset Management has been assigned Nordic companies.

A spokesperson told RI: “We are a Nordic actor. This means that we have more leverage in Nordic countries where we are well known, we know the companies and our exposure can be high. However, this does not limit us to only engage with Nordic companies.” 

In contrast, some respondents said they are using the initiative to broaden engagement to new regions or countries.

Cardano’s Druif told RI that the companies it has been assigned are located in Asia and North America “which also gives us the opportunity to expand our engagements beyond Europe”.  

In a similar vein, Kris Tomasovic Nelson, head of ESG investment management at Russell Investments, said the US investor is pleased that it can use the initiative to extend the geographic diversity of its engagement outreach. 

For non-US companies, however, Russell Investments “anticipates that local investors will primarily lead the engagement due to cultural and linguistic barriers, as well as various regulatory frameworks”, she added. 

Moving forward, some investors told RI they are already setting up their first meetings with their fellow engagement team members. 

Sophie Kamphuis, senior adviser responsible investment at MN, said: “We will discuss initial findings and status of the companies in the area of nature. We’ll look at companies’ current ambitions, the quality of materiality assessments by companies, target-setting and nature governance within the organisations.” 

*This article was updated on 26 January to include additional responses