A Robeco positioning paper to address biodiversity loss is being backed by a partnership with the World Wide Fund for Nature Netherlands.
The white paper is entitled ‘Robeco’s approach to biodiversity: Towards the integration of nature-related risks, opportunities and impacts in our investments’. It has been written by specialists from across Robeco’s engagement, climate and sustainable investing research teams and will form a blueprint for future policy in this arena.
However, the challenge is so complex that no single investor can do this on their own. Robeco is therefore proud to also announce the creation of a new partnership with the World Wide Fund for Nature Netherlands (WWF-NL) to complement existing collaborations such as the Finance for Biodiversity Pledge.
Integrating biodiversity
Both organizations are working together to integrate biodiversity into asset management. The partnership aims to develop a biodiversity investment framework and policy for Robeco and co-develop biodiversity investment strategies. It will also engage with clients and other stakeholders in the financial sector to create more awareness of the issue, and to inspire and activate them to integrate biodiversity into their policies.
The daily destruction of forests, plants and animals due to human activity is seen as a challenge as great as the one the world faces with climate change. Investors can play a role in tackling issues such as deforestation and land use change through engagement and the integration of nature-related risks (and opportunities) into decision making.
Playing a crucial role
“The financial sector and the asset management industry in which we sit has a crucial role to play in helping to prevent further biodiversity loss,” says Peter van der Werf, Senior Manager Engagement. “This is not something that is simply ‘nice to have’ in the context of sustainable investing: it is in the long-term interest of our clients and our investment performance, along with our duty to do our best to use our leverage to protect the planet.”
“Robeco has been addressing biodiversity issues for a number of years, through a dedicated engagement program on commodity-related deforestation, through our palm oil policy, and by assessing biodiversity as a material factor in our ESG integration process.”
“However, it is clear that there is much more that we need to do, both in terms of further engagement, and in embedding this factor systematically in our investment decisions. It’s no longer just a question of avoiding those companies that are responsible for biodiversity loss through their environmentally damaging operations. We must also embrace those companies that are striving to protect biodiversity, directing more capital towards these sort of sustainable enterprises.”
Outlining the urgency
The white paper outlines the urgency that biodiversity presents to the planet and the future stability of business life. The World Economic Forum estimates that more than half of the world’s economic output of USD 44 trillion is moderately or highly dependent on nature in some form, meaning that if natural systems collapse, so will our economic and financial systems.
The paper details the financial materiality this presents for investors: a heatmap assessment using data from the ENCORE tool (Exploring Natural Capital Opportunities, Risks and Exposure) developed by the United Nations Environment Programme Finance Initiative showed that around one-quarter of Robeco’s assets under management are highly dependent on at least one ecosystem service.
In line with the exposure of other financial industry participants, the assessment found that around 29% of Robeco’s investments are in sectors that have potentially high impacts on key drivers of biodiversity loss, led by use of land and freshwater, followed by climate change, pollution and direct disturbances. This shows that biodiversity is a highly material topic for investors and that action is needed across the financial industry to ensure that investments contribute to achieving the targets of the Convention on Biological Diversity.
