AXA IM: Clear expectations for how businesses will approach biodiversity protection and risks

AXA IM: Clear expectations for how businesses will approach biodiversity protection and risks

May 24, 2024

ESG-investing Climate Change
Biodiversiteit (Pixabay, AdinaVoicu).jpg

New architecture for biodiversity integration should equip investors with greater information and in turn help to catalyse corporate practices.

‘The global pledge to halt and reverse biodiversity loss – known as the Kunming-Montreal Global Biodiversity Framework (GBF) – is helping to shape and accelerate government policy as well as corporate and investor action in terms of protecting the natural world. The GBF signals that while great strides have been made in terms of tackling the biodiversity crisis, much more still needs to be done,’ AXA IM announces today.

‘The landmark agreement aiming, among other goals, to protect 30% of the world’s land, water and seas by 2030 was signed by 188 countries at the 2022 United Nations COP15 biodiversity conference. It consists of some 23 targets including integrating biodiversity considerations at every level of society and aligning all financial flows (target 14) and driving policy that will, among others, encourage and enable businesses to assess and disclose biodiversity-related risks, dependencies and impacts (target 15).’

New corporate disclosures on nature

‘More recent industry and regulatory efforts have focused on developing the necessary tools for better factoring biodiversity into policy, processes and implementation. A number of new, critical standards and frameworks on biodiversity have been published in just a short time-span – both voluntary and mandatory – setting clear expectations for how businesses will approach biodiversity protection and risks.

With widespread adoption, this new layered and complementary architecture for biodiversity integration should create more favourable conditions for investment in nature-friendly practices –equipping investors with greater information and in turn helping to catalyse corporate practices.

A wave of biodiversity-related disclosure standards and frameworks has recently been launched. These include:

  • the Taskforce on Nature-related Financial Disclosures (TNFD), September 2023
  • the European Sustainability Reporting Standards (ESRS), December 2023
  • the updated Global Reporting Initiative (GRI) Biodiversity Standard, January 2024

All three provide guidance for corporate disclosure on nature-related issues. However, they can also be more foundational tools for corporates approaching their use as more than a reporting exercise, providing information that can help guide necessary biodiversity assessments whose outcomes can in turn be integrated into risk management and other business processes.’

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