Stockholm (NordSIP) – As NordSIP has repeatedly noted throughout the year, biodiversity has quickly risen to the forefront of sustainable considerations, not least thanks to the upcoming COP15 meeting in Canada at the end of the year. Following the announcement last week that the Dutch Central Bank had launched a new e-Learning tool on biodiversity, now the attention has shifted to Finland.
Noting that biodiversity loss affects the economy and investment portfolios, Finnish insurance and pension provider Ilmarinen argued this was a relevant issue. According to its own portfolio assessment, “one-quarter of its direct listed investments significantly rely on biodiversity and natural capital. In turn, one third of the companies in the investment portfolio have a strong impact on biodiversity and natural capital.”
To this effect, and following the publication of its Climate Road Map in September 2021, guiding the Finnish insurance company’s path to net zero by 2035, Ilmarinen has now published its Biodiversity Road Map.
“Investors play an important role in safeguarding biodiversity. We need to identify and manage both biodiversity risks to investments and the harm to biodiversity arising from investments,” says Karoliina Lindroos, Head of Responsible Investment at Ilmarinen. “So far, economic growth has happened at the expense of natural capital base that includes biodiversity. In investment terms, we should not consume the capital base itself but rather live on interest,” Lindroos continues.
The report discusses how Ilmarinen explored ways to build understanding on biodiversity, assess the portfolio impact of biodiversity. It also studied how its investments could help address nature loss, such as through engagement. Last but not least, Ilamrinen argues it studied and how it could report its progress to the best industry standards, including considering the possibility of using the Taskforce on Nature-related Financial Disclosures Framework.
“Biodiversity needs to be taken into account in investment activities in the same way as climate change. Currently, there are only few biodiversity roadmaps available in Finland or globally. We want to contribute to creating new investor approaches,” Lindroos adds.
Ilmarinen’s roadmap highlights four steps it intends to take to protect nature in the next two years. 2023 will see the Finnish company begin enhanced risk-based due diligence on identified high-dependency sectors, starting with the materials sector. Ilmarinen will conduct its own reporting. From 2024 onwards, the pension company will increase activity-specific requirements, such as certifications. It will also increase its engagement effort to focus on increased reporting, governance and management issues around biodiversity.
“We did not wait for someone to develop a ready method for taking biodiversity into account. Instead, we created an approach ourselves based on information and approaches currently available. We also want to openly publish our approach so that we can discuss with other market participants and collaborate so that the investment industry develops better ways to take biodiversity into account,” Lindroos concludes.