Research from the World Economic Forum shows that US$ 44 trillion of global GDP—around half—is highly or moderately dependent on nature. But today, the impact of biodiversity risk on financial service providers- from commercial banks to pension funds – is not calculated in their decision making. Financial institutions around the world must operationalize pro-active biodiversity risk management – showing how material this is to their bottom line – by building internal capacity, develop policies and set targets that are science-driven and just. They need to be able to ask the right sector specific questions. And they need to support and give way to biodiversity positive projects to be funded, and need to give a voice to local communities in this process.
Step 1: Understand:
Step 1 is to understand exposure of portfolio’s to biodiversity risk, a common language to measure this impact, and 2-3 concrete targets (on sector level). The nature risk scoring application –under development- provides instant insights into the forward-looking physical, transition or reputational nature risk exposure of real asset portfolios. Special attention is given to landscape level impact, and link to current and future legislation.
Step 2: Strategize and set targets:
Through a set of internal and external meetings the team of the Hive develops an ambition on nature, This can take the form of a biodiversity policy and ambition – for example net positive impact on biodiversity with all investments by 2030 – but more importantly also a pathway to realize this ambition. And an engagement strategy with companies they invest in, such as minimum standards, exclusion criteria and active ownership and voting.
Step 3: Engage peers and society:
Learning is best done by sharing experiences with and from like-minded organizations. The Hive can advise on which biodiversity initiatives to join, and how to ensure you can both learn and contribute to the discussions effectively. But financial institutions never operate in a vacuum, for this reason dialogue with society at large need to be sought. The Hive provides you with a platform to engage with local communities on the basis of forward looking information.
Step 4: Develop alternatives:
The only way to make an impact is by closing the biodiversity financing gap. The Hive works together with your impact investment team to look and scout and support project development, for example on how criteria can be altered to improve financing of nature based solutions.