• 18 oct 2022
  • Blog
  • Assetmanagement

PGGM signs the Finance for Biodiversity Pledge

In the financial sector momentum builds to stop biodiversity loss, says Eloisa Menguzzo.
Eloisa Menguzzo

Eloisa Menguzzo

Analyst Responsible Investment

As a new signatory to the Finance for Biodiversity Pledge, PGGM has joined 114 financial institutions in calling on global leaders to agree on effective measures to reverse nature loss in this decade to ensure ecosystem resilience.

The ongoing loss of biodiversity and nature is a great concern. Nature has an intrinsic value that justifies in itself the need to protect it. Moreover, it provides humans with goods and services that underpin the functioning of our society by making (economic) activities possible, including the production and consumption of goods. Thus, the loss of nature is a threat to the functioning of our socioeconomic system and therefor a considerable risk for long-term investors like PGGM.

In recent years, momentum for action against biodiversity and nature loss finally appears to be building. Why now? First, the COVID-19 crisis provided the world with a shocking example of a nature-related risk materializing. The loss of natural habitats and biodiversity increases the risks of zoonotic diseases emerging. Nature conservation is thus a key element in the prevention of future pandemics. Second, global climate action is expanding its focus from carbon emissions reduction to a wider set of solutions, acknowledging that climate change is one element of a broader environmental crisis.

Despite this momentum, it remains challenging for institutional investors such as PGGM to integrate biodiversity and nature into their investment strategy. Compared to climate change mitigation, which has the overarching objective of greenhouse gas emissions reduction, nature is a much more complex topic that requires a multitude of goals, metrics, and pathways. Responsible investors need to act in sync to translate the complexity of the natural world into usable tools.

This starts by agreeing on common methodologies to assess the impact of our investments and requesting the right data from our investees- with a focus on the location of their direct and indirect operations and sourcing.

With this objective in mind, under the umbrella of the pledge, PGGM commits to:

  • Collaborating and sharing knowledge
  • Engaging with companies
  • Assessing impact
  • Setting targets
  • Reporting publicly on the above before 2025

Next to signing the pledge, PGGM also joined the Finance for Biodiversity Foundation which offers us a collaborative platform to address the challenge of biodiversity and nature loss in coordination with peers. Signing the pledge and joining the foundation are important milestones for PGGM. With our experience in responsible investing, we believe we can offer important insights that will benefit the mission of the Finance for Biodiversity project. We will build on our experience on the topics of deforestation and water scarcity.

At the same time, we see this as an opportunity to further develop our thinking and start engaging systematically with our investee companies. In this way, we aim to maximize our influence, hold companies accountable for their negative impact on biodiversity and nature, and encourage meaningful mitigation strategies.

In the future, we expect and hope nature to be further embedded in the climate political discourse, new shared methodologies (and, as a consequence, data) to be available, and the market for investible opportunities in this realm to grow. This shall enable for even more coordinated action from institutional investors. So, stay tuned!

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