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Measure Impact Investment on Biodiversity

Last May 2020, AXA Investment Managers, BNP Paribas Asset Management, Sycomore Asset Management and Mirova gathered more than thirty signatures from renowned investors from around the world to create measures of impact investment on biodiversity.

According to the Global Assessment Report on Biodiversity and Ecosystem Services (IPBES, 2019), the sixth mass extinction of life on Earth is underway at an unprecedented rate.

The population of mammals, birds, fish, amphibians and reptiles has registered an alarming decline of 68% on average since 1970, according to a recent assessment by WWF(Living Planet Report 2020).

The World Economic Forum estimates that, without a change in economic model, this crisis threatens half of the world’s Gross Domestic Product, while other trajectories could generate positive benefits estimated at 10 trillion dollars for companies, and create 395 million jobs.

For the first time in the 10-year outlook of the World Economic Forum survey, the top five global risks identified as the most likely are environmental, such as the major loss of biodiversity (Global Risks Report 2020).

Biodiversity loss threatens the achievement of 80% of the sustainable development sub-goals related to poverty, hunger, health, water, cities, climate, oceans and land (IPBES, 2019 ).

Acknowledging that much remains to be done to promote corporate transparency on dependencies and nature-related impacts, and that many challenges must be addressed to integrate biodiversity into management indicators and the latest scientific data into investment decisions, AXA Investment Managers, BNP Paribas Asset Management, Sycomore Asset Management and Mirova launched in January 2020 a call for expressions of interest for a data provider to help them deal with the biodiversity crisis.

This call was supported by a Declarationon the need to measure the impact on biodiversity which has collected more than thirty signatures from large institutional investors around the world, representing more than 6 trillion euros of assets under management.

Fourteen organizations responded to this call from six countries (United Kingdom, United States, Switzerland, Netherlands, France and Canada). Seven semi-finalists were invited to an oral presentation, and three finalists were selected. The jury, made up of the four asset managers, received valuable advice from a scientific committee and together selected I Care & Consult and Iceberg Data Lab to develop a tool allowing investors to measure the impact of their investments on biodiversity.

«We unanimously decided to adopt the innovative approach which combines the data modeling skills of Iceberg Data Lab and the deep expertise in biodiversity and methodological development of I Care & Consult. We look forward to reporting to our stakeholders on the impacts of our portfolios on biodiversity and gradually integrating them into our assessment and investment processes.»

Julien Foll AXA IM, Robert-Alexandre Poujade BNPP AM, Sarah Maillard Mirova and Jean-Guillaume Péladan Sycomore AM

After developing a biodiversity footprint tool applicable at the product level (the Product Biodiversity Footprint), then at the site level (the Biodiversity Footprint Site), I Care & Consult has decided to join forces with the supplier. of Iceberg Datalab to extend the “Corporate Biodiversity Footprint”.

This new measurement tool will aim to quantify the impact on the biodiversity of companies as a whole. It will thus allow investors to integrate the impacts of their portfolio on the biodiversity into their risk assessments.. In addition, the transparency of the selected approach will positively contribute to the required convergence towards more standard and comparable indicators. This should serve as an important catalyst for private sector action, with ripple effects across our economies.

Article: Joana Foglia – Source : I Care & Consult

Post Author: Wealth Monaco