Integrating Nature Related Risk in the Finance Sector

You can't manage what you don't measure.

With our investment activities, we want to contribute to the protection of biodiversity and are currently assessing our impact.

As a first initial step, we did high-level screening of direct nature-related impacts and dependencies for our portfolio of equity and bonds using the measurement tool ENCORE.

The web-based tool, called ENCORE (Exploring Natural Capital Opportunities, Risks and Exposure), helps global banks, investors and insurance firms assess the risks that environmental degradation, such as the pollution of oceans or destruction of forests, causes for financial institutions.

Storebrand 's highest exposure to impact-related risks stems from the solid waste impact driver, followed by water pollutants, soil pollutants, water use, non-GHG air pollutants and GHG emissions.

The industries in our portfolio with the most material nature-related impacts drivers are are utilities, consumer staples, materials and industrials. Furthermore, Storebrand’s highest exposure to dependency-related risks stems from the mass stabilization and erosion control ecosystem service, followed by surface water, bioremediation, ground water and flood and storm protection. The sub-industries with the most material nature-related dependencies are consumer staples, materials and utilities.

The impacts analysis was conducted between mid-June and mid-July 2022, followed by the dependency analysis that was conducted between mid-July to mid-August. Given that it is a high-level analysis, the results provide an initial picture of potential impact and dependency related risk associated with Storebrand AM’s portfolio. It shows how Storebrand AM’s aggregate investments are potentially directly dependent on key ecosystem services and how they potentially impact nature. Further analysis is recommended in future in order to understand these impact and dependency related risks in greater detail.

A fund having performed well in the past is no guarantee for future returns. Other factors with an impact on how a fund may perform in the future include market developments, the fund manager's performance, the fund's risk profile, and management fees. When the shares a fund is invested in decline in value, it may lead to negative returns.