Feature – ESG Club Conference 2022
ESG CLUB CONFERENCE: BIODIVERSITY
The E in ESG has dominated sustainable strategies. And the E has been dominated by climate change. Yet there is more to environmental issues than our climate. Biodiversity is coming more and more to the fore and for good reason. It gives us food, purifies our water and protects us from flooding. More than half of global GDP relies on nature, and 60% of medicines are based on natural organisms. That is why we are calling this discussion: Biodiversity: nature’s dividend.
Marion Maloney opened the discussion by announcing that she is on a journey when it comes to biodiversity. The head of responsible investing and governance at the Envi- ronment Agency Pension Fund once heard David Attenbor- ough say that we are completely dependent on natural capital. “I wasn’t aware of it, but my daughter was. She said it was “obvious” and she was only nine years old at the time,” Maloney said. “As an investor, we were focused on net zero,” she added. “Biodiversity came to the fore in our fund because we realised that assets in our low carbon portfolio had quite a bit of carbon and were not kind to the natural world. It was presenting a risk, so we started on a journey looking at biodiversity.” For Maloney there were many quite basic questions that needed answering. The biggest was how do you measure it. “Our asset managers, who are a green bunch, did not have a biodiversity policy. It was surprising at how few did, at that stage.
“When it comes to natural capital, there is an argument to look beyond climate change, beyond biodiversity, as it is all inter- linked. We are on a journey, it is not finished yet, but we are on it,” she added.
And the first stage of the journey is education, said Niamh 46 | portfolio institutional | September 2022 | issue 116
Boyle, an associate consultant and biodiversity specialist at Aon. “This is where we are with a lot of schemes,” she added. “It is understanding biodiversity: why it is important and dig- ging deep into why it is financially important.” Along with the Cambridge Institute, Aon examined the impact biodiversity has on the MSCI World index. “We saw a high dependency on water security within the index,” Boyle said. “That is the start of the educational side of things.” The next step for schemes is engagement, working with their asset managers. “You are paying them a lot of money, so you need to know if they are aware of the biodiversity risks and how they are managing them,” she added. “You have to push the boundaries there.” Mark Hill, who leads on all things climate and sustainability at The Pensions Regulator, is optimistic.
“Through embracing ESG and with the advent of the Task Force on Climate-Related Financial Disclosures (TCFD) the journey has started,” he said. “The data quality is evolving, the understanding is evolving.
“The journey has started in the absence of a global taxonomy or an international standard for sustainable reporting and with gaps in skills and expertise,” he added. For Hill, there is more to come. “It is a journey and it has seen
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60
