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The latest on investors and nature: Karner Blue Capital joins data project, while Amundi, Aviva and Sycomore sign Finance for Biodiversity Pledge

On the eve of International Day for Biological Diversity, here’s all you need to know about the biodiversity boom

RI has been kept busy with the flurry of developments on biodiversity and natural capital in recent months. Last month, we revealed that there were plans to launch a Nature 100+ by the end of the year, to facilitate collaborative shareholder engagement on the issue, mirroring Climate Action 100+’s work on decarbonisation.

We also broke the news this week that the World Benchmarking Alliance (WBA), best known for its corporate ranking on human rights, is developing a new assessment for companies with the biggest impacts on nature. The benchmark is expected to cover between 500 and 1,000 companies and will focus on the forestry, agricultural and tourism industries. 

All of this comes on the back of recent moves by BlackRock, the world’s biggest asset manager, to make natural capital one of its 2021 engagement priorities. The firm said in March it would seek to ensure that companies are “managing natural capital dependencies and impacts through sustainable business practices”. In another sign that biodiversity is catching up with climate change on the finance agenda, the Church Commissioners for England became the first investor to join Science Based Targets Network’s Corporate Engagement Programme. It will now help to devise targets, due to be published in 2022. The network told RI it is in talks with other investors about joining the programme too.

The latest investor to make an announcement on nature is Karner Blue Capital, which today told RI it had become the first US member of an investor group dedicated to biodiversity data. Early last year, AXA Investment Management, BNP Paribas Asset Management, Mirova and Sycomore formed a consortium to spur on thinking around nature-based data and metrics. They appointed French environmental advisory firm I Care & Consult and data provider Iceberg Data Lab to develop a methodology and tool. Matthieu Maurin, Co-founder of Iceberg, described Karner’s addition to the group as “a formidable opportunity to accelerate the momentum around natural capital”. By the end of the year, Maurin said that all members will hopefully have the possibility to calculate the biodiversity footprint of their portfolio and benchmark; adding there are plans for more investors to join the group.

Meanwhile, Amundi, Aviva and Sycomore Asset Management are among 18 financial institutions to sign the Finance for Biodiversity Pledge today – on the eve of International Day for Biological Diversity. This brings the total number of signatories to 55, representing some €9tn in assets. Launched last year, the pledge requires signatories to collaborate, engage, set targets and report on biodiversity by 2024 at the latest. 

And the Principles for Responsible Investment (PRI) is inviting investors to join another new group, this time dedicated to tackling deforestation. The group promises to be a forum where financial practitioners can “work together to end deforestation, linking metrics and setting clear timelines for action alongside the data, guidance and tools that already exist”. Further details have not yet been announced and investors have until 10 June to join.

The PRI is also calling on investors to feed into a ‘scoping study’ on biodiversity data, in a bid to understand the extent to which existing data initiatives on the topic “meet investor requirements, and identify data challenges and potential solutions”. 

Ratings giant Fitch has made biodiversity a focus of its sustainability work in recent months, insisting in a report last month that “a global framework for biodiversity is essential to unite countries and private investors to work towards goals and targets that replenish natural capital”. And that might be in the pipeline for later this year, when a rescheduled COP15 promises to produce an international biodiversity agreement for coming years. 

In the meantime, the UK government has said it will amend its Environment Bill to require legally-binding targets for species protection, in a move the Environment Secretary George Eustice said could provide a “Net Zero equivalent for nature”. The news has been welcomed by investors, with Sophie Lawrence, Senior Ethical, Sustainable and Impact researcher at Rathbone Greenbank Investments, telling RI it “helps establish a common framework for all stakeholders to contribute to, including companies and investors”.

The UK Sustainable Investment and Finance Association, UKSIF, is pushing for the country to go further, though – calling recently for the government to embrace upcoming recommendations from the Taskforce on Nature-related Financial Disclosure to be embraced in a similar way to the TCFD, which rulemakers have put at the centre of a slew of new regulations. 

Fitch echoes this in its report, saying that “currently it is difficult for issuers to measure their biodiversity footprint and investors to quantify their exposure to biodiversity risks”. A globally-recognised reporting framework, it argues, needs to be developed in consultation with the market and other stakeholders to overcome this challenge. 

India’s regulator has already announced that, from 2022, its largest 1,000 listed companies will be required to disclose biodiversity performance as part of a suite of new sustainability reporting requirements. The central bank of Malaysia also finalised its climate taxonomy, which includes transition activities and a ‘no significant harm’ principle focused on pollution, biodiversity, and resource efficiency.

In anticipation of the need for biodiversity data, a group of investors including the EIS Climate Change Fund, known as the ‘Green Angel Syndicate’ has this week pumped £1.5m into data firm NatureMetrics as part of a £6.5m Series A funding round.