• 22 may 2023
  • Blog
  • Assetmanagement

The road to nature conservation and restoration

Investors need a legislative framework for biodiversity that is executable and gives unambiguous guidance for methodologies and due diligence targets, according to Eloisa Menguzzo, Luuk Tupker and Wouter ten Cate.
Eloisa Menguzzo

Eloisa Menguzzo

Analyst Responsible Investment
Geen Pasfoto 480X480 Pggm

Luuk Tupker

Investment Trainee

On the International Day for Biological Diversity, May 22nd, we want to emphasize the need for ambitious legislation to tackle the threat of biodiversity and nature loss. Biodiversity and nature are in sharp decline and this represents a threat to the foundations of our society and economy. PGGM welcomes the Kunming-Montreal Global Biodiversity Framework (GBF) and the legislative proposal for a European Nature Restoration Law. We call upon EU legislators to develop a legislative framework that is executable, complementary and consistent with other environmental regulation.

Ambitious and usable legislation
In December 2022, the United Nations Biodiversity Conference (COP15) ended in Montreal with an historical landmark agreement to guide global action on nature to 2030. The subsequent GBF provides for an extensive and ambitious framework to tackle biodiversity loss on a global scale.

By pledging to protect 30% of global land territory and 30% of global sea territory by 2030, 196 countries agreed to restore and conserve nature. The UN High Seas Treaty has further stipulated global sea territory conservation, by ensuring the protection and sustainable use of marine biodiversity of areas beyond national jurisdiction.

After its finalisation at the COP16 in Turkey in 2024, the GBF is supposed to be implemented in national legislation. In the meantime, the European Commission kickstarted the COP15 with the publication of its proposal for a Nature Restoration Law. As of now, it targets to protect 20% of European land and 20% of European waters by 2030.

PGGM invites the EU legislator to have an holistic approach to the topics of climate change and biodiversity by looking at these in the broader context of natural capital and environmental preservation. Biodiversity targets (and implementation) should be complementary and consistent with other environmental regulation.

Finally, both the GBF as well as recent regulatory developments in the EU such as the Sustainable Finance Disclosure Regulation (SFDR) aim to enhance disclosures, transparency around impacts of companies and financial institutions on nature and the risks deriving from its loss. We welcome enhanced transparency, but we will benefit most from legislation that is usable, clear and in line with industry developments.

At the moment, there are several industry-led initiatives that are working on methodologies to achieve standardization and target setting in this field. Examples of such initiatives are the Taskforce on Nature-related Financial Disclosures (TNFD) and the Science-based Targets Network (SBTN). It is fundamental to steer for consistency across approaches in order to enhance usability. The regulator would benefit from using best practices from these market-led initiatives, as they provide more guidance for disclosure standards and data collection.

Our approach to biodiversity and nature loss
As an investor of €228 billion on behalf of PFZW, the Dutch pension fund for healthcare workers, we aim to make an impact through investing in a responsible way and by engaging with our investee companies. PGGM encourages companies to take action to understand and mitigate their contribution to the direct drivers of biodiversity and nature loss as defined by the Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES). These drivers are changes in the use of land and sea, the exploitation of organisms, climate change, pollution, and species invasions.

In parallel to and in function of this, investee companies should collect relevant data and assess their exposure to nature-related risks, impacts and opportunities according to the principles of the initial guidance provided by the TNFD and the SBTN. PGGM encourages investee companies to mitigate the extent of their negative impact by embedding the preservation of nature into their strategies and by adopting virtuous practices such as pollution reduction, resource efficiency, circular design and process and sustainable procurement.

In addition, we support investee companies to take action by adopting regenerative practices, nature-based solutions, and investing in nature restoration. Moreover, we are actively contributing to collaborative action with peers, as highlighted in the Finance for biodiversity pledge, that we signed in 2022. Through this, we strive for a harmonious co-existence with nature, while governmental standards are under development.


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