12.2.4.1 Breaking down the BES concept: a 'materiality matrix'

Breaking down the concept of biodiversity into sub-themes is a first step to making it a subject for business-performance rating. Applying a sector-specific approach, in which the most relevant impacts and risks per sector are identified, would be desirable. The research results evidenced that it is considered material to formulate the business case for asset managers in order to assist them in incorporating the constituent parts of biodiversity into their analysis. Linking other environmental issues to BES-related issues will also be helpful to increase understanding by asset managers. Both environmental NGOs and asset management companies have a role to play in this process. The outcome of the process could be a concise and useful guide that provides a sector-specific analysis of materiality, and flags key issues or ecosystem services, that should be investigated by an investor in respect of any company within a specific (sub) sector. However, having a clear understanding of the concept and an overview of the relevant themes per sector alone will not suffice. The translation from 'sector-specific' to 'company-level' analysis requires the involvement of ESG Agencies.

In order to create a solid effect on investment practices, all actors need to be involved in the process of 'breaking down the issue', preferably starting in the early stages. In this way, knowledge-based institutions, i.e. certain NGOs as well as scientific institutions, can benefit from the experience and capacity of asset managers and ESG Agencies, and vice versa. The process stays as close to practice as possible. Asset managers will be educated and could potentially be rewarded with learning credits. ESG Agencies can develop new products and find an already informed group of asset managers that might be willing to purchase their new BES information products. The newly developed products will meet the practices of asset managers. Furthermore, this type of collaboration could provide a framework that will facilitate the communication between the different stakeholders on BES performance. Figure 4 shows the potential for interaction between knowledge-based institutions, asset managers and ESG Agencies. Additionally, it will be vital for the progress to make use of, and to integrate, relevant, existing initiatives.1