Einde inhoudsopgave
Corporate Social Responsibility (IVOR nr. 77) 2010/13.2.3
13.2.3 The biodiversity business case for investors
Mr. T.E. Lambooy, datum 17-11-2010
- Datum
17-11-2010
- Auteur
Mr. T.E. Lambooy
- JCDI
JCDI:ADS363379:1
- Vakgebied(en)
Ondernemingsrecht (V)
Voetnoten
Voetnoten
For further information, please see: www.unpri.org, accessed on 2 March 2010.
APG advises ABP, the second largest pension fund in the world. For more information see: http://www.apg.nl/apgsite/pages/default.asp> and http://www.abp.nl/abp/abp/english/about_abp/, accessed on 3 November 2009.
Report: ' Responsible Investments in Focus: How Leading Public Pension Funds are Meeting the Challenge', 2007, prepared by UNEP FI and UKSIF, at: http://www.unepfi.org/fileadmin/documents/infocus pdf, accessed on 28 April 2010
Survey of institutional investors concerning their responsibility for corporate ESG policies conducted by Novethic, with the support of BNP Paribas Investment Partners, 2009. See: http://www.novethic.com/novethic/v3_uk/upload/ESG_Study.pdf, accessed on 21 July 2009.
Thomson Extel & UKSif SRI & Extra-financial survey, 2006. Based on the Extra-financial survey 2006. One of the questions was to rate the importance of the following types of environmental data: (1) pollution incidents, (2) contaminated land, (3) greenhouse gas emissions, (4) resource efficiency, (5) prosecutions and fines, (6) biodiversity. Biodiversity was rated 6 out of 6 as being the least important. The report is available at: http://www.innovestgroup.com/pdfs/2006-07-13_THOMSON_EXTEL.pdf, accessed on 3 July 2009.
The Economics of Ecosystems and Biodiversity, Interim Report, UNEP, 2008, at: http:// www.bmu.de/files/pdfs/allgemein/application/pdf/sukhdev_interim_report.pdf, accessed on 3 September 2009.
As demonstrated in chapters 3 and 12, capital markets also show signs of becoming aware of sustainability issues. Over 600 of the world's largest asset owners and asset managers, responsible for investments exceeding in total USD 19 trillion in 2009, have endorsed the PRI (see Box 13.1). Investors increasingly appreciate information on extra-financial aspects of companies' business, such as ESG. They purchase such information from 'sustainability-rating agencies' (ESG Agencies; see chapter 12). Another sign is that various stock exchanges and other institutions have established sustainability indices, such as the Dow Jones Sustainability Indices, FTSE4GOOD, Domini 400 Social Index and ETHIBEL. ESG Agencies provide ESG information to these sustainability indices and cooperate with them in the ranking of companies. This chapter has a different perspective. It will explore the interest of investors to invest in projects and funds that directly contribute to conservation and the sustainable use of BES.
Box 13.1 Socially Responsible Investment (SRI)
Since the launch of the United Nations Principles for Responsible Investment (PRI) in 2006, the number of institutional investors and pension funds that became a signatory to the PRI has increased significantly.1 They communicated that the ambition is to pay more attention to the environmental and social behaviour of the companies in which they invest, and to address governance issues. Stock exchanges around the world are also becoming increasingly active in raising awareness of ESG issues and standards among listed companies, driven by calls from institutional investors through initiatives like the UNEP Finance Initiative (UNEP FI) and the PRI. One of the latter'ssix principles calls on investors to "seek appropriate disclosure on ESG issues by the entities in which they invest." As Rob Lake,2 the head of the sustainability department of APG (i.e. a large Dutch asset manager specialising in pension funds, amongst which ABP), has stated: "ABP firmly believes that integrating environmental, social and governance (ESG) factors into its investment processes will help to improve risk-adjusted financial returns. Engaging with companies to improve their management of ESG risks is an integral part of this. We have expanded our resources in this area recently and plan to do so further in there future."3
According to a survey among institutional investors in the Netherlands, France and the UK, more than 70 per cent of the surveyed investors believe it to be their responsibility as a shareholder to pay attention to the ESG policies of a company.4 Another survey however shows that only a few investors rank biodiversity conservation as a main concern at the top of their list of shareholder priorities.5 For instance, only five per cent of French institutional investors have indicated that they see 'protecting biodiversity' as a priority. There appear to be two reasons for this. Firstly, investors seem to have little knowledge of investment possibilities linked to biodiversity. Secondly, on a more fundamental level, there is a lack of understanding that ecosystem degradation and species loss are directly interlinked with human well-being and the stability of 'normal' business activities. A long-term vision which includes these ecosystem concerns lacks. However, the perception regarding ' business and biodiversity' is changing. New markets that support and reward BES are developing.6 An overview of these new investment opportunities will be provided in the next section.