Schroders: First Group Nature Report
Schroders, a global leader in active investment management, announces the publication of its first Group Nature Report, underscoring the firm’s commitment to actively navigating nature risks and meeting clients’ investment expectations in this space.
The report follows the recommendations of the Taskforce on Nature-related Disclosures (TNFD) issued in 2023. It aims to identify potential nature-related risks and opportunities and how Schroders is responding to them.
The TNFD was launched in 2021, receiving global endorsements from the G7, G20 and then UN Special Envoy for Climate Action and Finance, Mark Carney. Schroders has become an early adopter among its financial services peers to publish these disclosures.
The report follows the launch of Schroders’ proprietary tool, NatCapEx, earlier this year, which supports nature-focused, TNFD-aligned analysis across 9,000 public companies, building on Schroders’ flagship SustainEx model.
Andy Howard, Global Head of Sustainable Investment, Schroders, said:
“As a proudly active asset manager, we are leading by example through proactively disclosing our nature-related risks and opportunities, as well as developing our new proprietary tool, NatCapEx, to help fill the nature data gap.
“With the world’s natural environments under growing pressure, measuring and managing the nature-exposed risks of our investments is becoming increasingly important.
“We also hope this voluntary disclosure in line with TNFD will help galvanise broader progress in corporate and investment disclosures. We will continue to engage with companies to encourage them to publish their own nature-related disclosures and shed light on this increasingly important risk and opportunity.”
According to the Group Nature Report, the degradation of nature, such as changes in soil quality or water availability, and the consequential loss of ecosystem services that economic activity depends upon, pose financially material risks to clients’ potential investment returns.
For example, the World Bank estimates even a partial collapse of three ecosystem services - pollination, fisheries and timber production - would cost the global economy 2.3% of GDP annually.
At the same time, the shift to nature-positive practices could unlock USD $10.1 trillion of annual business opportunities for investors.
Some of the key findings of Schroders’ Group Nature Report include:
Our investment focus:
- We assessed our holdings across public and private assets to establish a comprehensive view of our greatest nature-related impacts and dependencies. The main impacts include carbon emissions, water use and terrestrial ecosystem use. Our highest dependencies are water-related.
- In 2024, we updated the expectations we have of companies in our Engagement Blueprint to align with the goals and targets of the Global Biodiversity Framework and the expectations of TNFD. These entailed, for example, to work towards the disclosure of location data on assets, operations and material suppliers of high impact commodities.
- As a participant in Nature Action 100’s inaugural year in 2024, we participated in six collaborative engagements across various sectors including mining, chemicals and consumer staples companies, which has provided a step change in the industry’s approach to engagement on nature issues.
Schroders Group:
- At our London headquarters, the total waste produced decreased by 36% compared with 2019 levels.
- Recycling rates at our London headquarters have increased from 75% in 2019 to 92% in 2024.
- We have conducted biodiversity surveys at our campus in Horsham, given its proximity to a biodiversity sensitive area.
