The global alliance includes Desjardins, Fondaction, Manulife, Nordis, and Vancity
A global coalition of investors is calling out some of the world’s largest companies for their impact on biodiversity.
With more investors focusing on how erosion of natural habitats is impacting climate change and the resources we need to live, the new report highlights the oversized damage that some industries and companies are having.
The pilot study of the MSCI World Index was conducted by Finance for Biodiversity (FfB) Foundation, a global investor-coalition which includes Canada’s Desjardins, Fondaction, Manulife, and Vancity; and co-lead of the Technical Advisory Group of Nature Action 100 (NA100).
The analysis found that the food (in particular), beverage and tobacco sector has the highest potential impact on biodiversity of all identified sectors at 21%, followed by the materials sector at 18%.
It’s not the first time that consumer staples have been flagged for their ESG impact.
“Investors need this type of information for collaborative action on engagement with companies, impact assessment and target setting on nature,” said Anne-Marie Bor, Co-Founder of FfB Foundation.
She added that the finding that 250 of the MCSI Index companies may be responsible for 73% of biodiversity impact means there is opportunity for investors to “bring substantial change with dedicated and focused corporate engagement efforts.”
Food industry impact
The analysis found that the food products industry had 20 companies on the list but accounted for 18% of the average normalised impact per industry, while oil, gas and consumable fuels had 24 companies listed but 13% impact.
“What’s really interesting is that a relatively small number of companies are responsible for this impact – this means that focused engagement by investors based on these results could drive real, positive change for biodiversity,” said Annelisa Grigg, Director and Sustainability Advisor at environmental consultancy Globalbalance.
Engagement is key
Liudmila Strakodonskaya, responsible investment analyst at AXA Investment Managers and co-chair of the FfB Foundation’s Impact Assessment working group was involved in the multi-tool study.
“Investors may use the conclusions of the study to identify the key biodiversity risk areas and hot spots in terms of sectors and companies within their portfolios,” she said. “Engagement with those industries will then be key to ensure transformative change and transition to less nature-intensive business models.”
More details of the study are at financeforbiodiversity.org
