Stockholm (NordSIP) – A global coalition of investors from Sweden, Denmark, the Netherlands, the United Kingdom, Switzerland, Australia, Canada, and the United States has issued a joint call for the governments attending COP16 in Colombia to take ambitious policy and regulatory action to halt and reverse global biodiversity loss. The joint declaration was published today 23 October 2024 and is co-signed by 27 pension funds and asset owners representing $2.5 trillion wort of assets under management.
The initiative has been led by Sweden’s AP7, Canada’s Caisse de dépôt et placement du Québec (CDPQ), the Church of England Pensions Board, Australia’s HESTA Super, and the UK’s Universities Superannuation Scheme (USS). The letter has also been signed by Sweden’s AP1, AP3, AP4, Länsförsäkringar AB, and Denmark’s AkademikerPension.
The asset owners’ declaration is framed in pragmatic terms, emphasising the material systemic risk to global markets represented by nature and biodiversity loss. As long-term universal owners, they point out that they cannot use diversification or stock selection to avoid these risks and therefore call for a concerted effort to address the root causes of nature loss to protect their beneficiaries’ interests. In concrete terms, they want governments to take the following actions:
- Establish ambitious national targets, nature-related transition plans and commitments to halt and reverse biodiversity loss, with a focus on transformation of key sectors, stopping deforestation, and protecting and restoring critical ecosystems.
- Develop mandatory disclosure regulations for companies with material nature-related impacts or dependencies, as well as nature-related transition plans, with metrics strongly tied to biodiversity outcomes.
- Establish and implement regulation to protect nature and biodiversity for all sectors that contribute to the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services’ (IPBES) five drivers of biodiversity loss, which are land use change and habitat loss, exploitation and overfishing, climate change, pollution, and invasive species and disease.
- Invest in the development and scaling of financial mechanisms to protect and restore nature and biodiversity.
The investors urge nations to take a ‘whole of government’ approach in addressing the biodiversity crisis, which if left unchecked is bound to undermine investor confidence and ultimately drag down long-term portfolio returns.
Commenting on the publication of the joint statement Flora Gaber, Manager ESG Analysis at AP7 said: “Biodiversity loss is a risk to our entire global economic system. This is a systemic risk which investors cannot avoid through diversification. Businesses must contribute to a nature-positive society in order to maintain long-term profitability and this is most feasible to achieve with consistent regulations and policies around the world. It is in the interest of all companies, investors and governments.”
COP16 is underway in Cali, Colombia and will run until 1 November 2024.
