A group of 26 financial institutions and asset managers responsible for more than $3 trillion in assets under management have pledged to make a positive contribution to biodiversity through their activities and investments at the United Nations General Assembly.
The group, which includes Caisse de Dépôts, HSBC Global Asset Management and New Forests, have launched the Finance for Biodiversity Pledge this week and have called for other organizations to join them.
Thomas Burbel, CEO of AXA Group and another signatory to the pledge, will speak on behalf of the 26 organizations at the Biodiversity Summit of the UN General Assembly on September 30.
Speaking to sister title Agri Investor, Sydney-headquartered timber asset manager New Forests said it had supported the pledge because “while biodiversity risks are increasingly understood from a scientific standpoint, we need action through policy and business to mitigate these risks.”
Signatories to the pledge commit to taking five actions by 2024 at the latest: sharing knowledge on biodiversity assessment metrics and targets; engaging with other companies to improve their biodiversity credentials; assessing their own biodiversity impact; setting and disclosing biodiversity targets; and reporting publicly on how they are contributing both positively and negatively to global biodiversity goals through their investments and portfolios.
“There will be a positive feedback loop as policy targets are adopted, spurring business action. It’s our aim to be a leader in this, showing policymakers and business alike that investors can make a meaningful difference,” New Forests director of sustainability and communication MaryKate Bullen told Agri Investor.
“By joining this pledge, we hope we can lead from the forestry and land use perspective – where we have a clear and deep understanding of biodiversity issues – and showcase how investors can assess impacts, set targets, and disclose impacts.”
The concept ties in with a broader discussion of natural capital that has grown increasingly prominent in 2020.
HSBC Global Asset Management, a signatory to the pledge, launched HSBC Pollination Climate Asset Management in partnership with Pollination Group earlier this year. The pair aim to raise a $1 billion fund to invest in areas including forestry, regenerative and sustainable agriculture, water supply, nature-based biofuels and natural ecosystems capable of storing carbon.
New Forests CEO David Brand said his firm does not view natural capital as a separate asset class but rather a concept that is relevant to every asset class.
“However, we also increasingly see the joint emphasis on climate change mitigation and the conservation of nature morphing together into the concept of natural climate solutions,” he said.
“We believe that investments in forestry and agriculture will evolve to encompass climate mitigation and conservation. This could expand revenue streams to include payments for climate mitigation, species recovery, wetlands restoration and protecting natural ecosystems.
“Whether forests are producing timber or sequestering carbon or providing habitat for endangered species, they can still be characterized as ‘real assets’ that deliver total returns from the underlying asset value as well as cashflows. Some of the value proposition may increasingly link to the NPV [net present value] of future ecosystem services, and cash yield could come from selling climate mitigation benefits, but these are still analogous to growing and selling timber.”
Bullen said that the success of the pledge will be judged on whether there is greater consistency in biodiversity disclosures across asset classes alongside broader application of biodiversity risk assessments.
“Success will see businesses taking up science-based targets for nature, with investors being a key driver for this action through their own engagement, measurement, and reporting,” she said.
The full 26 signatories of the pledge are: Achmea Investment Management, ACTIAM, Aegon Nederland, Allianz France, ASN Bank, ASR Nederland, AXA Group, Bank J. Safra Sarasin, Bankinter, Caisse des Dépôts, Domini Impact Investments, Etica Sgr – Responsible Investments, HSBC Global Asset Management, Karner Blue Capital, Mirova, New Forests, NN Investment Partners, NWB Bank, Piraeus Bank, Rabobank, Robeco, Triodos Bank, Triple Jump, UFF African Agri Investments, Vancity Investment Management and Volksbank.