As attention to biodiversity increases in private markets, CPP Investments and CDPQ’s Ivanhoé Cambridge – the 12th and 13th largest private real estate investors – are trying to stay laser-focused on climate.
“Carbon reduction and net zero is in no way under control. It’s not time to turn our attention to biodiversity or elsewhere just yet,” Pamela Thomas, US real estate managing director at CPP, told members at the PERE Network America Forum 2023.
“Good point, well made,” said Michael Neuman, head of industrial for the US and LATAM at Ivanhoé Cambridge and a fellow panellist. Biodiversity disclosures and protection efforts are a “distraction”, he added. “It’s all about carbon emissions and energy reduction. That’s where we need to keep our attention – while still making money [for policyholders]… It’s maybe a bit politically incorrect to say, but you can get points for a lot of other stuff. It’s nice to have, but in the end, we need to focus on carbon.”
Thomas added: “When biodiversity or other aspects of ESG threaten investment returns, they will get attention from us. And when they offer investment returns, they will get attention from us.”
The comments came as biodiversity becomes a growing concern for much of the finance industry. Many private fund managers are starting to incorporate the theme in diligence (“Nature and biodiversity are becoming topics increasingly raised by our investors,” Arjun Infrastructure Partners’ head of ESG Rhyadd Keaney-Watkins wrote for NPM a year ago). And the Taskforce on Nature-related Financial Disclosures released its final framework in September. While reporting in line with this framework is currently voluntarily, parts of it have been incorporated into the EU’s Corporate Sustainability Reporting Directive and the UK’s Green Finance Strategy.