If there was ever a topic built for stewardship it is


biodiversity. Tim Manuel, Aon


How important is biodiversity to long-term investors? Bruce Jackson: People cannot survive without nature. As a pen- sion scheme we have a primary duty to invest in the best finan- cial interests of our members and their beneficiaries. Systemic financial risks need to be taken account. Biodiversity is increasingly looking like one of those financial risks. I heard on the radio that we are going through an extinction event. It is human induced and unless we get a handle on it, we do not have much of a future. David Vyravipillai: We recognise the threat the world is under from nature loss. Railpen is responsible for our members’ financial futures and that means taking biodiversity risk into account.


There is literature that points to the role financial institutions have to play in this space. For example, The Dasgupta Review, published at the beginning of 2021, explains how financial institutions should shape the future of our planet.


What are the big biodiversity issues that investors should consider? Rebecca Woods: Biodiversity can be looked at through a number of areas. Deforestation is one way we approach it.


8 February 2023 portfolio institutional roundtable: Biodiversity


Then there is the food sector, looking at how crops are reliant on biodiversity and the links that certain issues can have, such as pes- ticides. Other areas in which biodiversity can be looked at include plastics and the ways toxic emissions are entering our planet.


Gabriel, what biodiversity issues do you consider when building portfolios? Gabriel Micheli: Biodiversity is part of our investment process. Pictet has had environmental strategies for more than 20 years in water, clean energy and timber, but 10 years ago we started looking at how we could measure our impact. All companies say that they solve an environmental problem, but maybe in solving one they create another. It is, therefore, important to take a holistic view of the issues. Biodiversity is important because it is the health of the planet. We use a combination of metrics to calculate it. Land-use change, for instance, has a big impact on biodiversity, while cli- mate change is another. We have also developed a methodology to assess biodiversity impact because we are not getting enough data from compa- nies. I hope it improves with the Taskforce on Nature-related Financial Disclosures (TNFD).


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