The ESG Investor Nature Data for Institutional Investors event on December 4th brought together industry leaders to explore how institutional investors can better measure, account for, and mitigate their impact on nature. The discussions highlighted the importance of nature-related data, evolving regulatory frameworks, and the power of stewardship in driving positive change.

The Role of Regulations in Nature Data:

Regulations are essential for creating a standardized framework to assess nature-related financial risks. Unlike climate data, nature data remains fragmented and inconsistent. This presents significant challenges for investors. Key issues include data silos, lack of standardisation, and high costs associated with accessing reliable datasets.

Cathrine Armour, Director of Data Initiatives at the Taskforce on Nature-related Financial Disclosures (TNFD) outlined a few emerging solutions. TNFD is developing sector-specific guidance and creating a public data facility to make nature data more accessible. Additionally, they are working to establish global standards that align nature data with broader environmental, social, and governance (ESG) frameworks. These efforts aim to provide investors with the tools needed to accurately assess biodiversity risks and make informed investment decisions.

Investors’ Responsibility in Integrating Nature into Investment Decisions:

Investors play a critical role in transitioning to a nature-positive economy. Karen Ellis from WWF emphasised that biodiversity loss poses significant economic risks. Including supply chain disruptions, asset devaluation, and increased market volatility. In fact, biodiversity loss could reduce the UK’s GDP by 6-12% by 2030. This would represent a financial impact greater than the 2008 financial crisis.

Leading investors are beginning to recognize these risks and are taking steps to integrate nature into their investment strategies. This involves bridging the gap between science and finance. In addition, also leveraging advanced technologies like geospatial data, and adopting frameworks such as TNFD. Practical steps for investors include: conducting biodiversity footprint analyses, setting measurable targets aligned with global biodiversity goals, and collaborating with stakeholders to drive systemic change.

Stewardship: A Catalyst for Change:

Stewardship emerged as a powerful tool for addressing nature data challenges and driving corporate change. In a panel moderated by our Founder at Maanch, Darshita and experts discussed how investors and NGOs can work together to promote effective stewardship.

• Scottish Widows, in collaboration with the Zoological Society of London, has been quantifying its nature footprint to better understand biodiversity risks and opportunities. Lee Backhouse shared that  this partnership has not only enhanced their ability to assess environmental impacts. It also enabled more informed and constructive engagements with investee companies. For instance, they successfully influenced a company to adopt nature-positive practices. This helped them learn valuable lessons on how to align corporate strategies with biodiversity goals.

• The World Benchmarking Alliance, through its Nature Collective Impact Coalition, evaluates 750 global firms but prioritises direct engagement with 30 high-impact companies. By leveraging comprehensive data sets, WBA selects companies with the greatest potential for change. Consequently driving improved nature stewardship and encouraging better transparency in reporting biodiversity impacts. Melis Ford spoke about a notable success story involving influencing a major corporation to enhance its data disclosure and implement measurable biodiversity targets.

• Meanwhile, the Principles for Responsible Investment (PRI) focuses on tackling deforestation and land-use change through its Advance and Spring initiatives. PRI’s stewardship efforts rely heavily on accurate data to track companies’ supply chain impacts. In one case, Marine Le Calvez-Yassine explained that sustained engagement led to a company providing more transparent data on deforestation risks. They ultimately committed to a zero-deforestation policy across its operations and supply chain.

• Izzy McConnell also explained that, through its involvement in Nature Action 100,  Federated Hermes utilises data to identify companies with significant nature-related risks and dependencies. By engaging with these companies, Federated Hermes has influenced several firms to adopt biodiversity action plans. In one instance, they used geospatial data to highlight a company’s impact on critical ecosystems. This prompted the company to shift its practices and integrate biodiversity considerations into its operations.

Across all these initiatives, technology plays a pivotal role in aggregating and analyzing complex nature-related data. Allowing and enabling investors to make informed decisions and advocate for meaningful corporate change. From biodiversity footprinting to geospatial mapping and advanced data analytics, these tools are essential for driving effective stewardship and aligning investment portfolios with global biodiversity and sustainability goals. Technology solutions such as the Maanch Engagement Tracker are central to align data tracking and reporting to achieve change through active engagements.

Conclusion:

The ESG Investor Nature Data event underscored the urgent need for investors to integrate nature-related considerations into their strategies. With biodiversity loss posing significant financial risks, investors must leverage data, collaborate with stakeholders, and adopt robust frameworks such as the TNFD. Stewardship plays a crucial role in driving corporate change, and technology is a key enabler in this process. By aligning investment portfolios with global biodiversity goals, investors can mitigate risks, unlock new opportunities, and contribute to a more sustainable and nature-positive economy