A Step Towards Greener Saving
A new guide focused on greener saving has been launched this week, offering pension trustees a step-by-step approach to tackle biodiversity loss and nature risk in their investments. Developed by international conservation charity ZSL in collaboration with CACEIS Investor Services, the guide provides practical insights and tips, covering crucial aspects such as the challenges of biodiversity risk, the definition of biodiversity, key drivers of biodiversity loss, risks to pension schemes, and how trustees can evaluate biodiversity risk within their schemes.
Urgency in Addressing Biodiversity Risk
According to ZSL senior sustainable finance specialist James Pilkington, saving for our future holds little meaning if there is no future to save for. The Living Planet Index by ZSL, which monitors human pressures and impacts on the natural world, has shown an alarming average 69% decrease in monitored global wildlife populations between 1970 and 2018. With nature providing services that support 44% of the global economy, the finance sector, including the pensions industry, bears a significant responsibility in mitigating the biodiversity crisis.
A Practical Guide for the Pensions Industry
The new guide from CACEIS serves as a valuable starting point for the pensions industry, demystifying the complex topic of biodiversity risk and providing a clear framework for approaching the issue. James Pilkington emphasizes the importance of the finance sector, particularly pension funds, in taking ownership of the risks and impacts of their portfolios. By understanding and addressing biodiversity loss, pension funds can protect both the environment and their investments while safeguarding quality of life for future generations.
Recognition of Biodiversity Risk on the Global Stage
The World Economic Forum’s Global Risk Report 2023 has highlighted biodiversity and ecosystem collapse as the fourth most significant global risk over the next ten years. Regulators and frameworks, such as the Task Force on Nature Related Financial Disclosures, are increasingly focusing on biodiversity risk management. The recent United Nations Biodiversity Conference (COP15) and the upcoming launch of the Task Force’s new framework in September 2023 further underscore the urgency of addressing biodiversity loss.
Taking Responsibility for a Greener Future
Pension funds, with their long-term investment view, must acknowledge that future biodiversity loss will significantly impact their financial returns. Instead of solely relying on asset managers, pension funds need to understand and take ownership of the risks and impacts of their portfolios. By implementing clear policies and actions to protect the environment and their investments, pension funds can contribute to building a healthier future for wildlife, people, and the planet.
ZSL’s Vision for a Greener Approach to Investing
ZSL firmly believes that nature can recover, and effective conservation efforts rely on science, innovation, and global collaboration. With the global pensions market holding over $56 trillion in assets, the sector has a unique opportunity to lead the way in adopting a greener approach to investing. By embracing sustainable practices and prioritizing biodiversity conservation, the pensions industry can contribute to building a healthier future for all.
A Call to Action: Greener Pensions from the Ground Up
The guide, part of CACEIS Academy—an educational platform for pension scheme trustees and asset management fund boards—promotes a greener approach to pensions from the ground up. By deepening the understanding of biodiversity risk and providing actionable guidance, CACEIS aims to foster a mindset that acknowledges the significant risk of biodiversity loss and nature degradation, alongside the attention given to climate change. The collaboration between CACEIS and ZSL underscores their commitment to delivering educational resources and driving positive change within the pensions industry.
Pension trustees now have the opportunity to download ‘Why Biodiversity Matters’ from the Saving for our future section of the Zoological Society of London’s website. As trustees embrace the concepts and recommendations outlined in the guide, they contribute to a future where greener investments and biodiversity protection go hand in hand. To learn more and support ZSL’s world-leading collaborative science and conservation work, visit www.zsl.org.
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