New biodiversity guide aims to boost understanding
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Few pension schemes are very familiar with nature investment, the Pensions and Lifetime Savings Association has found, and has published a new biodiversity guide in response. Pension funds are taking action on climate, however. Despite some challenges, nearly two-thirds of pension schemes have a net zero commitment and three-quarters support the development of credible transition plans.
Less than a fifth (17%) of organisations are highly familiar with disclosure recommendations by the Taskforce on Nature-related Financial Disclosures, the PLSA’s research suggests. Data access (83%) was considered the top challenge, while other barriers range from setting measurable biodiversity targets (77%) to navigating the complexity of identifying and assessing biodiversity-related risks (68%).
To support schemes with their understanding of nature and biodiversity, the PLSA has now published ‘Nature’s impact – why biodiversity loss matters to pension schemes and what to do about it’. The guide recommends five steps for pension schemes when looking to address nature through investments:
Less than a fifth (17%) of organisations are highly familiar with disclosure recommendations by the Taskforce on Nature-related Financial Disclosures, the PLSA’s research suggests. Data access (83%) was considered the top challenge, while other barriers range from setting measurable biodiversity targets (77%) to navigating the complexity of identifying and assessing biodiversity-related risks (68%).
To support schemes with their understanding of nature and biodiversity, the PLSA has now published ‘Nature’s impact – why biodiversity loss matters to pension schemes and what to do about it’. The guide recommends five steps for pension schemes when looking to address nature through investments:
- engaging with training opportunities;
- conducting portfolio assessments;
- engagement and stewardship;
- engaging with nature-based investment opportunities available;
- considering policy advocacy and target-setting exercises.
Of the organisations that plan to adopt TNFD recommendations, about three-quarters (73%) aim to do so within the next five years.
“As investors and the economy work more widely towards a net zero future, the survey underscores the need for greater clarity, improved data, and stronger government support to overcome the challenges ahead,” the PLSA’s deputy director of policy, Joe Dabrowski, said.
He added that “action on biodiversity lags behind climate efforts, though frameworks like TNFD aim to bridge this gap”.
Pension funds are considerably more comfortable with integrating climate considerations. Most schemes are aiming to be net zero aligned, as 65% have a commitment in place and among the third who do not, around one in five expect to implement one within five years, according to the PLSA.
Of the schemes asked about integrating net zero, 59% feel a lack of high-quality data is a major barrier, and 55% highlight uncertainty around government policy as another big obstacle. A third of respondents also cite regulatory uncertainty and limited investment opportunities in low-carbon assets (35%) as further obstacles. Among pension plans that have a net zero commitment, 23% target 2040, while a majority (44%) expect to reach this between 2040 and 2050.
“As investors and the economy work more widely towards a net zero future, the survey underscores the need for greater clarity, improved data, and stronger government support to overcome the challenges ahead,” the PLSA’s deputy director of policy, Joe Dabrowski, said.
He added that “action on biodiversity lags behind climate efforts, though frameworks like TNFD aim to bridge this gap”.
Pension funds are considerably more comfortable with integrating climate considerations. Most schemes are aiming to be net zero aligned, as 65% have a commitment in place and among the third who do not, around one in five expect to implement one within five years, according to the PLSA.
Of the schemes asked about integrating net zero, 59% feel a lack of high-quality data is a major barrier, and 55% highlight uncertainty around government policy as another big obstacle. A third of respondents also cite regulatory uncertainty and limited investment opportunities in low-carbon assets (35%) as further obstacles. Among pension plans that have a net zero commitment, 23% target 2040, while a majority (44%) expect to reach this between 2040 and 2050.
