Schroders strengthens natural capital focus with Plan for Nature

by | Nov 7, 2022

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Schroders announced it has published its Plan for Nature, further supporting our client-led focus on this fast-developing and increasingly important investment priority.

The Plan outlines Schroders’ ambition to channel investment into this key area and support the transition to a nature positive future.

Nature risk is increasingly recognised as an integral factor to business risk, with more than half of global GDP believed to be dependent on the natural world[1]. Furthermore, new research[2] suggests unpriced nature and climate risk could wipe billions off the world’s food and agriculture companies.

The Plan sets out three focus areas to help the firm minimise nature risk in investment portfolios and help make nature based solutions more investible:

1.  Insights: Schroders is developing its understanding and analysis of nature risk through proprietary tools to value nature and identify exposure to nature risk.

2.  Influence: As a leading active manager, Schroders is engaging with and influencing companies to reduce their exposure to nature risk and deliver positive impacts on nature.

3.  Innovation: Schroders is developing new solutions in both public and private markets that channel capital to protect and restore nature and aim to deliver long-term returns.

Peter Harrison, Group Chief Executive at Schroders, said“The reality is stark: nature risk is fast becoming an integral factor to investment risk and returns. As a leading active investment manager, Schroders has an important role to play. Accelerating a nature-positive future is a part of our fiduciary responsibility to our clients.

“In order to continue to deliver robust, long-term returns, it’s critical we mitigate the nature risk embedded in portfoliosThat’s why we are setting out our ambition on nature; we want to harness the power of investment to accelerate a nature positive future, creating real investment potential for our clients.”

The Plan sets out Schroders’ priority areas for action which includes raising and deploying capital across nature-based solutions through our recently-announced partnership with Conservation International to launch Akaria Natural Capital, one of the first dedicated natural capital investment managers in Singapore.

It also encompasses our impact funds offered through BlueOrchard, a leading global impact investment manager which is part of the Schroders Group, as well as tracking companies’ progress on commodity-driven deforestation and measuring the outcomes of Schroders’ engagement on biodiversity and natural capital through annual reviews against engagement objectives.

The Plan also builds on the action Schroders has taken to date, which include the launch of Akaria Natural Capital, investing in natcap research to map natural capital assets globally and committing to eliminate agricultural commodity-driven deforestation by 2025.

Schroders has also joined the ‘Make it mandatory’ call to Heads of State, which requires all large businesses and financial institutions to assess and disclose their impacts and supply chain connections with nature by 2030.

Schroders will continue to engage with its partner coalitions driving change at a system level, including through engagement at COP15 and through contributions to the Taskforce on Nature-related Financial Disclosures (TNFD)Science Based Targets for Nature (SBTN)Natural Capital Investment Alliance and as a signatory of the Finance for Biodiversity Pledge and Business for Nature’s ‘Make it Mandatory’ campaign.

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