The Principles for Responsible Investment (PRI) has launched its engagement process for Spring, an investor stewardship initiative focused on tackling the material financial risks of biodiversity loss by 2030.
Some 204 investors collectively representing $15trn in assets under management (AUM) publicly supported the initiative of which 66 will be actively involved in the engagement with 40 focus companies.
A key feature of the initiative is responsible political engagement – a core tenet of corporate governance – and investors will engage with focus companies on how they use their influence to tackle deforestation risks.
David Atkin, PRI’s chief executive officer, said: “Whichever way you look at it, nature risk is climate risk. What we’re seeing today from investors is a recognition of the importance of nature when managing material investment risks, including deforestation and biodiversity loss, when aligned with their individual fiduciary duty.”
He said that the initiative provides an opportunity to our signatories to address the financially material risks stemming from global nature loss.
He continued: “In doing so, we’re also supporting the investment community’s contribution to and alignment with the objectives and targets of the Global Biodiversity Framework agreed by more than 190 governments.”
The initiative has a particular focus on geographies that are home to critical natural ecosystems and that face future risk of forest loss and land degradation, engaging with companies from emerging markets, including Brazil, as well as those from regions that source forest risk commodities from these countries.
Companies will be engaged across the food and agriculture, mineral mining, automotive, chemicals and banking sectors, including: L’Oreal (lead investor CCLA Investment Management, Dorval Asset Management); Toyota (lead investor Nomura Asset Management); Bayer (lead investor Erste Asset Management, Osmosis Investment Management); and Brasil Foods (lead investor JGP).
PRI said the launch of the initiative marks the “starting point” of the engagements.
In the coming months, it plans to convene smaller engagement groups for each of the 40 companies to develop targeted and constructive engagement strategies. It explained that the focus companies have been identified as influential actors in the dynamics of forest loss and land degradation due to either their direct or indirect exposure or their significant role in engaging policy makers.
Investors will engage with companies with the objective of improving nature impacts and risks in their business operation and risk management; supply chain management; and political engagement.
Denisio Liberato, CEO of BB Asset Brazil, one of the lead investors in the Spring initiative, said the world is at a pivotal moment in the preservation of nature and biodiversity.
“We need to foster the urgent implementation of public policies that mitigate the risk of biodiversity loss across several supply chains,” he said, adding that through UNPRI Spring, investors “can enhance the impact of corporate engagement processes on nature and advocate for a more sustainable and balanced planet, which will also bring more resilient long-term investment returns”.
Lucie Smith, soft commodities forum senior manager at WBCSD, added that by facilitating direct engagement between investors and corporations, the Spring initiative has the potential to foster the development and implementation of nature-positive, climate-positive and equitable value chains.
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