Biodiversity and Ecosystems
Nature underpins all economic activities. Businesses depend on it for direct inputs, such as water and materials. They also have an indirect dependence on it for production processes, such as through erosion control and flood protection. Protection and sustainable management of oceans, forests, wetlands and other sensitive ecosystems is essential to long-term social and economic stability. Environmental degradation puts at risk the capacity of nature to continue to generate the ecosystem services which businesses and society depend on. Failure to recognize business dependencies and impacts on nature exposes companies, and the financial institutions that invest in them, to ‘hidden’ risks.
Storebrand Asset Management has through the Finance for Biodiversity Pledge made a commitment to protect and restore biodiversity through our investments. We expect companies to mitigate impacts on biodiversity and ecosystems through commitments at the organisational level and respect international agreements such as the UN Convention on Biological Diversity. Companies depending on or impacting biodiversity and ecosystems should integrate relevant nature-related risks and opportunities into their corporate strategy, risk management and reporting. Reporting standards and principles in this area are still evolving, and once the Task Force on Nature-related Financial Disclosure (TNFD) has delivered a standardized reporting framework for biodiversity, we expect our investee companies to report in line with these recommendations.
We call on companies to demonstrate a commitment to halt the loss of biodiversity and degradation of ecosystems through taking the following steps:
- Companies should have strong awareness and governance around nature-related risks and opportunities.
- Companies should set biodiversity commitments and create action plans with short-, medium- and long-term targets, and disclose performance against these.
- Companies should assess their direct and indirect dependencies and impacts on biodiversity and ecosystems and incorporate such assessments into their policies and business management.
- Companies involved in value chains of commodities with deforestation risk should adopt no deforestation or no-conversion commitments.
- Companies should adopt a precautionary approach where there is a risk of significant biodiversity and ecosystem impacts and disclose information at the appropriate level of detail on operations in or sourcing from environmentally vulnerable areas.