Rathbone Greenbank’s 23rd annual Investor Day

Adapting to the challenges of the ongoing coronavirus pandemic, Rathbone Greenbank hosted its 23rd annual Investor Day online for the first time.

Over 400 subscribers joined an expert panel of speakers in an informative debate on the relationships and interdependencies between business and global biodiversity.

With the threat of extinction now extending to almost a million species, there is a corresponding threat to the wider ecosystem services that support societies and economies. 

With the threat of extinction now extending to almost a million species, there is a corresponding threat to the wider ecosystem services that support societies and economies. Our increasing disruption of nature and the resulting spread of zoonotic diseases also highlight an urgent need for investors and businesses to better understand and mitigate the causes of biodiversity loss.

In the eyes of the Woodland Trust’s chief executive Darren Moorcroft, trees are essential for the preservation and development of natural habitats and a powerful weapon in the fight against climate change. Trees provide many different and vital benefits, including large-scale carbon sequestration, flood prevention, and improved air and soil quality. Working to protect ancient woodlands and create new, biodiverse-rich native habitats, the Trust has planted over 47 million trees since it was founded in 1972.

In 2019, the Committee on Climate Change recommended that the UK commit to net zero carbon emissions by 2050. In response, the government pledged to increase the nation’s tree cover from 13% to 19% – equivalent to planting around 30,000 hectares a year. This is an important step as the UK is actually one of the most nature-depleted countries in the world. Restoration at this scale provides real value to social and economic wellbeing and the Trust is encouraged by a significant rise in corporate funding for conservation projects. Business support is also helping to ensure the biosecurity of native trees, reducing the prohibitive cost and biodiversity impacts associated with imported pests and diseases.

Annelisa Grigg, director of Globalbalance, provided some insight into the status of global biodiversity and the risks and opportunities prevalent in the business world. With extinction rates accelerating, the WWF’s Living Planet Index estimates that almost 70% of global biodiversity has been lost since 1970. Habitat clearance for agriculture has been a significant factor, along with pollution, the importation of invasive species and increased marine exploitation – all of which have created a vicious circle of biodiversity loss and climate change.

In 2010, the Convention on Biological Diversity developed five strategic goals and 20 individual sustainability targets. But, to date, none of these has been met. 

In 2010, the Convention on Biological Diversity developed five strategic goals and 20 individual sustainability targets. But, to date, none of these has been met. Engagement with business is therefore essential to promote a nature-positive economy. Encouragingly, businesses are showing increased sophistication in their biodiversity management and a greater willingness to commit to net positive impacts. Progress is also being made in developing biodiversity metrics, business incentives and reliable datasets. 

Ed Ellis of the IBAT Alliance explained how the Integrated Biodiversity Assessment Tool (IBAT) provides companies and investors with reliable, evidence-based biodiversity data to shape operational and investment decisions. Biodiversity decline affects five key areas of risk for any business: reputation, legislation, fiduciary duty, resource security and stakeholder relations. Businesses therefore need more information to manage biodiversity impacts, demonstrate good practice and benefit from market and investor opportunities.

IBAT is a web-based biodiversity reporting and mapping tool developed in association with the finance sector. It provides critical information on conservation and development activities in protected environments, as well as Key Biodiversity Areas that are recognised for having significant ecological value.

Krystyna Springer, senior research analyst at ShareAction, assessed the investment community’s understanding of biodiversity loss and the steps being taken towards future engagement. With a need to redirect investment capital into business models that reduce biodiversity loss, pressure needs to come from mainstream finance. Institutional investors and pension schemes are well placed to engage with companies, governments and policymakers. This incentivises biodiversity protection and translates it into relevant targets for the private sector.

However, ShareAction’s assessment of 75 of the world’s largest asset managers found that none had a dedicated biodiversity policy and fewer than half engaged with corporate strategy on biodiversity. Evidence also suggested that few investors have a nuanced understanding of biodiversity’s relation to economic stability. Engagement barriers include the absence of agreed biodiversity measurement methodologies, a dearth of corporate data and the lack of any internationally agreed goals in the manner of the Paris Agreement. There’s nevertheless scope for investors to create a new biodiversity narrative by emphasising the links to climate change, engaging with evolving metrics and supporting regulatory initiatives.

Sophie Lawrence of Rathbone Greenbank concluded the presentations by explaining why there’s a strong commercial, as well as moral, case for biodiversity investment. With more investors putting sustainability at the heart of their investment strategies, biodiversity losses also create risks for long-term portfolio performance. Greenbank has responded by including a ‘habitats and ecosystems’ theme to its sustainability analysis which closely maps the UN Sustainable Development Goals.

Engagement is key to expanding the integration of biodiversity into Greenbank’s assessment process.

Engagement is key to expanding the integration of biodiversity into Greenbank’s assessment process. Most recently, Greenbank has been active with the Investors Initiative for Sustainable Forests, along with projects investigating the links between deforestation and food production, and the traceability of food sources through complex supply chains.

While the presentations were taking place, over 40 questions were being submitted by viewers for our speakers to answer when they reconvened virtually for a final Q&A session. As always at our Investor Day events, these invited more thoughtful discussion – and were too numerous for us to ask all of them in the time available! 

All the presentations from the Investor Day are now available to view on demand,  and summaries of the talks will be included in the next issue of the Rathbone Greenbank Review which will be delivered in the new year.