You cannot get to net zero without looking at biodiversity and nature-


related risks. Mark Hill, The Pensions Regulator


these important solutions? It is not fair to say that offsets are completely unreliable. There is a spectrum. de Zylva: I am not saying there is no role for offsets. What I am saying is that everyone wants to carry on as normal. Take the aviation industry, for example. They want to continue expand- ing while doing a little bit of the good stuff on the side. They have to fundamentally change. Going back to the point about land, where are the investors willing to play the long game over decades, arguably centuries? There are property investors who no longer build on a plot of land and then sell it. Instead, they maintain the asset and become good landlords. It is a different business model. Where are the investors who will take the same approach through their stewardship? Micheli: That is what we do. Pension funds ask us to engage more with companies to make them accountable. de Zylva: It feels like corporate social responsibility, which is so 1990s. I do not know which investors are challenging their companies to be where they need to be. It is different from: “Let’s do some green investments.” Micheli: We do that. We are open to working with other organi- sations. We have partnerships with Ceres, FAIRR and other non-governmental organisations and have signed the Finance for Biodiversity Pledge. Ten years ago, engagement was not always taken seriously by companies. Today, they have more people to answer questions. It has changed and will continue to do so. de Zylva: I see a lot of spin, not much substance. I look at these reports, the PR, the adverts and read the Financial Times and I could not name a company that is well on its way to moving


12 February 2023 portfolio institutional roundtable: Biodiversity


from four stars to five stars in the next two years. Manuel: Nobody’s perfect, but if there was ever a topic built for stewardship it is biodiversity. With climate there is a central pil- lar where you can translate a global problem into a portfolio problem into a company problem. That does not exist in the same way with biodiversity. Fund managers tell us that where they are engaging on this topic, companies are lapping it up. Everyone wants to know more. Everyone recognises that there is a challenge. It does not matter that we do not have the metrics or the data to show the progress we are making individually or at a portfo- lio level. Everyone needs to engage and learn from others. Woods: There are a lot of engagements taking place that people are much quieter about than they would be on climate. When it comes to climate there are clear metrics people can use to set targets, while on biodiversity, due to there being so many aspects to the issue, people are engaging on smaller sub-sections. No one is saying they are a leader in biodiversity because we do not know what a leader in biodiversity looks like yet. There are different actions taking place, like the Finance for Biodiversity Pledge, Nature Action 100 and Investors Policy Dialogue on Deforestation (IPDD), which engages with countries on policy. There are fragments of biodiversity engagements taking place, but these people are not claiming to be a leader in biodiversity. Manuel: This has spawned a new term: “green hushing”. It’s where people are afraid to put their head above the parapet because it is too easy to be shot down. There is a client we work with who has 100-year liabilities.


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