Biodiversity risk guide created for pensions industry
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The Zoological Society of London, together with Caceis Investor Services, has launched a new guide for pension funds to provide a starting point and offer a framework for tackling biodiversity loss and nature risk in investments.
The international conservation charity’s guide covers the current challenges of biodiversity risk, the definition of biodiversity, key drivers of biodiversity loss, risks to pension schemes, and how trustees can initiate the evaluation of biodiversity risk within their schemes.
ZSL senior sustainable finance specialist James Pilkington said: “Saving for our future will mean nothing if there is no future to save for.”
He highlighted that 44% of the global economy is dependent on the services nature provides, while ZSL’s Living Planet Index, which tracks human pressures and impacts on the natural world, has recently shown an average 69% decrease in monitored global wildlife populations between 1970 and 2018.
“People today paying into pensions should be confident that their investments will not harm the environment: as asset owners and investors, the finance sector has a significant responsibility in mitigating the biodiversity crisis,” Pilkington said, adding: “But make no mistake, it’s a complicated topic.”
The World Economic Forum's Global Risk Report 2023 highlighted biodiversity and ecosystem collapse as the fourth most significant global risk over the next 10 years.
The United Nations Biodiversity Conference (COP15) concluded recently, while the industry also awaits the upcoming launch of the Taskforce on Nature Related Financial Disclosures’ framework in September.
Pilkington said pension trustees should not pass the responsibility for biodiversity issues on to their asset managers but take ownership of the risks and impacts on their portfolios, putting policies and actions in place.
“We are committed to delivering educational resources for pension schemes and trustees,” said Pat Sharman, country managing director UK at Caceis.
“While climate change has received significant attention, it is vital to acknowledge the equally important risk of biodiversity loss and nature degradation. We have partnered with the Zoological Society of London to delve deeper into the concepts of biodiversity risk and provide trustees with actionable guidance.”
The guide forms part of Caceis Academy, an education platform set up for pension scheme trustees and asset management fund boards.
Is your pension fund considering biodiversity risks?
