(Tuesday 10th September) Today, ShareAction, the responsible investment charity, and UN Environment Programme World Conservation Monitoring Centre (UNEP-WCMC), have launched a new report setting out how investors should strengthen their approach to protect some of the world’s most important biodiversity-rich areas. The guidance highlights the critical role investors need to play to help halt and reverse biodiversity loss through their investment policies, capital allocation and portfolio stewardship processes.
The report focuses on the particular approach needed when investing in or near areas that have been designated as protected by governments, due to their rich biodiversity. These include areas such as the Central Amazon Conservation Complex and the River Dee in the UK. It describes practical steps investors should take to incorporate protected areas into their environmental and social risk management processes, establish clear expectations for investee companies and follow robust escalation strategies where expectations have not been met.
Key recommendations for investors include:
· Assess and mitigate biodiversity impacts across portfolios but recognise the additional importance of protected areas. Investors should also assess if any assets or sites within their portfolios intersect with, or are adjacent to, protected areas.
· Set ambitious targets to ensure that all assets within protected areas are only engaged in activities that align with the management plan or designation of the respective protected area.
· Define expectations for companies to assess, disclose and manage their direct and indirect area of influence, which could extend well outside their physical footprint.
· Ensure that investee companies have assessed whether assets intersect with lands managed by Indigenous Peoples or local communities and have adequately followed Free, Prior and Informed Consent processes.
· Have a robust escalation strategy that covers biodiversity engagement priorities. Escalation policies should also consider the possibility of divestment if biodiversity risks are not addressed.
Commenting on the report, Alexandra Pinzon, Head of Biodiversity at ShareAction, said: “We know investors are not doing enough to adapt their investment policies to tackle the destruction of important ecosystems in protected areas.
“To address the global extinction crisis and unprecedented decline of nature, investors must recognise the vital role of protected areas as a tool for biodiversity conservation and strengthen their investment policies and engagement with companies accordingly.
“We need to see investors use the huge power they wield to reduce their nature-related risks and impacts, especially on internationally-recognised areas of importance for biodiversity conservation. This would also be beneficial for investors, as the regulatory shifts required to deliver the ambitions of the Global Biodiversity Framework result in more stringent biodiversity protections and the expansion of protected areas, which could lead to stranded assets, reputational damage and other financial consequences.”
Over the last few years, ShareAction has monitored the responsible investment policies and performance of the world’s largest asset managers, assessing the ambition and transparency of their approaches to responsible investment and safeguarding against key social and environmental risks, including policies to protect vital biodiversity.
ShareAction’s latest benchmarking reports have shown significant room for improvement in the way asset managers and insurers protect against risk towards protected areas as well as their own financial returns. 64 asset managers and 50 insurers assessed by ShareAction lack clear evidence of policies to manage risks associated to protected areas.
Welcoming the report’s recommendations, Neville Ash, Director of UNEP-WCMC, said: “Asset managers and asset owners can drive positive impacts for nature through their investment decisions. For example, when they engage with companies and exercise their voting rights, they can be influential in ensuring that businesses respect and help manage protected area networks. I therefore welcome this guidance, which clearly lays out the steps investors should take to reduce their risk associated with protected areas and drive positive change. As we move towards COP16, this is a valuable step toward the whole-of-society action that the Kunming-Montreal Global Biodiversity Framework calls for.”
Notes to editors
For more information or to request interviews, please contact the ShareAction press office at press@shareaction.org or +44 20 7183 4184
ShareAction and UNEP-WCMC's guidance on risk management in protected areas builds on wider biodiversity strategies, including the Taskforce on Nature-related Financial Disclosures and the Global Reporting Initiative.
ShareAction is an NGO working to shape a world where the financial system serves our planet and its people. We mobilise global investors to use their influence to drive up labour standards, tackle climate change, protect the natural world, and improve people’s health. We push policymakers to ensure the financial system is working in the best interests of society. We work with people to create a movement for change. Visit shareaction.org or follow us @ShareAction to find out more.
The UN Environment Programme World Conservation Monitoring Centre (UNEP-WCMC) is a global centre of excellence on biodiversity and nature’s contribution to society and the economy. It operates as a collaboration between the United Nations Environment Programme and the UK charity WCMC. UNEP-WCMC works at the interface of science, policy and practice to tackle the global crisis facing nature and support the transition to a sustainable future for people and the planet: www.unep-wcmc.org
1. Protected areas are a key instrument for the conservation of nature. Their importance for nature has long been recognised by the international community, including through the Kunming-Montreal Global Biodiversity Framework.
2. Recent studies estimate that around 37% of species will be threatened or extinct by 2100 (see United Nations Environment Programme ‘State of Finance for Nature 2023’). The loss of biodiversity is listed in the top five global risks in terms of impact to the global and financial system by the World Economic Forum.
3. Research from S&P Global Sustainable1 has previously shown “that about 70% of companies in the S&P Global 1200 have at least one asset in a protected area”, further highlighting why investors must urgently strengthen their investment policies, capital allocation and portfolio stewardship processes.
4. ShareAction’s ranking of the world’s largest asset managers’ approaches to responsible investment, Point of No Returns 2023, is available here.
5. ShareAction’s benchmark of the insurance sector, Insuring Disaster 2024, is available here.
