Allianz has revealed plans to develop a new approach to managing biodiversity dependencies, impacts, risks and opportunities in its portfolio.
The insurance giant published a case study on Wednesday demonstrating how it uses guidelines from the Taskforce on Nature-related Financial Disclosures (TNFD) to assess different asset classes.
It assessed the level of exposure that two sovereign issuers – Germany and Australia – have to nature, based on their levels of conservation areas and forests, the condition of their ecosystems, and the extent to which they protect them.
Allianz also evaluated some of its real estate and infrastructure assets – mainly renewable energy, grids and pipeline projects – and four corporates from the chemicals, biotech and pharmaceuticals, and mining industries. For this analysis, it looked at the proximity of assets to areas of biodiversity importance, protected areas and areas with threatened species.
“The case study was conducted to gain insights into best practices for biodiversity-related assessments, available datasets and tools to perform such assessments, challenges and lessons learned,” said Allianz. A spokesperson told IPE the insurer was now “exploring developing a systematic approach to biodiversity for a single sector”.
“The targeted approach is intended to deepen our analysis by focusing on areas where biodiversity data is most accessible and relevant, such as sectors with direct operational impacts,” the spokesperson explained. “This allows us to effectively explore data aggregation methodologies and assess how to translate diverse biodiversity data into actionable insights for our portfolio.”
Allianz’s announcement is the latest in a string of moves by European asset owners to address nature-related risks and impacts.
Earlier this month, Sweden’s KPA Pension adopted biodiversity targets, which will underpin a new engagement programme. The asset owner, which is part of the Folksam Group, reportedly plans to kick off discussions with 16 companies from food, chemicals, biotech and pharmaceuticals, personal care, metals and mining, consumer goods, restaurants and pulp and paper sectors this year.
It will set new biodiversity-related goals in 2026.
Fellow Scandinavian asset owner Ilmarinen published its third annual report on nature, as part of commitments it made in a biodiversity roadmap released in 2022.
Like Allianz, much of its work in the space is based on the TNFD’s framework.
“Every year we look at how to take it another step further, because it’s such a fast-evolving area,” said Karoliina Lindroos, head of responsible investment at the €62bn Finnish pension insurance company. “This year, we focused on water issues because they stand out as a top driver of nature-related risk for our portfolio.”
The key sectors for Ilmarinen’s work on water are pharmaceuticals, semiconductors and forestry, and it uses data from environmental corporate reporting body CDP to assess the current state of play.
Lindroos said the results so far have been mixed. “We look at things like whether a company has targets in place, whether they’ve been fined over the past year for things like water. Who in the organisation has responsibility for nature issues? Is the board aware of environmental risks and opportunities when they do financial planning?”
Typically, she notes, companies in the forestry and pharmaceuticals industries are strong in these areas, but the same cannot be said for semiconductor businesses. The analysis helps Ilmarinen work out which companies to target for engagement – either directly, if it is a Finnish firm, or via a collaborative global initiative like Nature Action 100.
Beyond corporates, Ilmarinen is in the process of implementing a dedicated biodiversity roadmap for domestic real estate, which includes targets and timelines.
“The next goal is to revisit our broader biodiversity roadmap, to see how we can evolve it further,” said Lindroos.
Despite the growing demand from asset owners for nature-related information, recent research shows biodiversity and water are among the least reported topics by companies in Europe. An assessment of the first sustainability statements published under the EU Corporate Sustainability Reporting Directive revealed that just 44% of firms deemed biodiversity to be material – even in sectors with high biodiversity impacts – and the figure fell to 37% for water.
The Net Zero Asset Owner Alliance is planning to provide some guidance to its members on how to manage deforestation, with a report due on the topic in coming weeks.
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