A coalition of 27 of the world’s largest pension funds has urged governments at the COP16 summit to introduce policies and regulations aimed at halting biodiversity loss.
The group, which includes Swedish pension fund AP7, Australian super fund Hesta, Canadian Caisse de dépôt et placement du Québec (CDPQ), and the UK’s Church of England Pensions Board and Universities Superannuation Scheme, is calling on policymakers to develop national sector transformation plans and mandate corporate disclosures on biodiversity outcomes. They have also put forward proposals for regulatory measures to protect nature, alongside financial mechanisms to support nature restoration.
At the core of the statement is an acknowledgement that policymakers must move beyond discussions of data and disclosure frameworks and enact binding measures if biodiversity loss is to be reversed, said Laura Hillis, director of Climate and Environment at the Church of England Pension Fund.
“The market will not solve the biodiversity crisis by focusing on data and disclosure alone. A significant increase in investor engagement with policy, and more interaction with governments, is needed to put in place the regulations required to address the root causes of biodiversity loss,” she said.
Bertrand Millot, head of Sustainability at CDPQ, added: “Since COP15 and the 2022 Kunming-Montréal Global Biodiversity Framework, biodiversity has become increasingly relevant to the financial sector. It is essential to unite stakeholders to support the transition to a more sustainable and resilient world. We need proactive policies from governments and greater collaboration between public authorities and the private sector to accelerate progress in biodiversity preservation.”
The investors are calling for corporate disclosures to be linked directly to biodiversity outcomes, not just limited to risk reporting. They argue that companies should make every effort to avoid unintended negative consequences for nature and biodiversity, and they are pressing for greater transparency in corporate lobbying on biodiversity issues.
The coalition is also calling for binding regulation to prevent biodiversity loss, emphasising that regulatory bodies must be properly resourced, and that penalties for non-compliance should be clear and enforced.
On financial mechanisms, they suggest that concessional or blended finance could play a key role in halting biodiversity loss, particularly in nature-rich countries. Additionally, they propose that well-defined taxonomies and bond frameworks, which fully account for contributions to nature preservation, could help raise capital to address the issue.
Concessional finance, lending below market rates to incentivise certain outcomes is still nascent. However, there are some examples of investors committing to the strategy. For example, Temasek announced last month a S$100m concessional capital commitment to fund energy transition assets in Asia.
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