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Today, the Finance for Biodiversity (FfB) Foundation launched the beta version of the Nature Target Setting Framework for Asset Managers and Asset Owners. Developed in collaboration with its members, this framework assists asset owners and managers in addressing significant nature-related systemic financial risks and contributes to achieving the targets outlined in the Kunming Montreal Global Biodiversity Framework (GBF).
The Nature Target Setting Framework empowers investors by offering suggested strategies and methodologies for establishing nature-related targets. It also introduces an accountability mechanism to guide their investment and capital allocation decisions in combating nature loss.
The framework outlines four categories of nature targets designed for asset managers and asset owners. Initiation targets facilitate investors in evaluating their exposure to nature-related impacts, dependencies, risks, and opportunities. These targets aid in integrating results into the organization’s governance, strategy, and activities, aligning with their fiduciary responsibility. Sectoral, engagement, and portfolio coverage targets enable investors to establish engagement and stewardship objectives at the sectoral level. Initially focusing on ten priority sectors, these targets can be consolidated at the portfolio level for monitoring and reporting purposes.
According to UNEP’s 2022 State of Finance for Nature report, private financial flows towards activities that protect or restore nature are about 26 billion US dollars per year. In contrast, trillions of dollars per year are invested into harmful activities. Asset managers and asset owners have the capacity to significantly support a green economic transition by focussing their stewardship and investment policies away from activities that damage nature and towards investments that restore and protect nature and promote the sustainable use of biodiversity.
With only six years left to 2030, it is urgent to act now. Finance for Biodiversity Foundation’s guidance on nature-related target setting for asset managers and asset owners provides a pragmatic step-by-step guide to enable financial institutions to set targets for action and to initiate the necessary transition towards a nature-positive future.
– Dr. David Cooper Acting Executive Secretary of the Secretariat of the Convention on Biological Diversity (CBD)
The Finance for Biodiversity Foundation extends an invitation to all asset owners and asset managers, even those who have not signed the FfB Pledge, to utilize this guidance document. They are encouraged to contribute to its future development and promptly establish, disclose, and report progress on nature-related targets as soon as it becomes feasible for their respective organizations.
The Finance for Biodiversity Foundation suggests that asset managers and asset owners set initiation targets to be accomplished by 2026 at the latest. Additionally, time-bound sectoral, engagement, and portfolio targets should be achieved by 2030 or sooner. Those who have pledged to the Finance for Biodiversity commitment are dedicated to disclosing one or more types of targets before December 31, 2024, which will be reported in their 2025 disclosures based on 2024 data.
Explore the Framework
Finance for Biodiversity Pledge: In total 153 financial institutions representing 24 countries and over 21.4 trillion euro in assets signed the Finance for Biodiversity Pledge in 2023. The Pledge was initiated by a group of 26 financial institutions calling on global leaders and committing to protect and restore biodiversity through their finance activities and investments and launched during the Nature for Life Hub at 25 September 2020 and the Biodiversity Summit of the United Nations General Assembly at 30 September 2020.
| All opinions expressed are those of the author and/or quoted sources. investESG.eu is an independent and neutral platform dedicated to generating debate around ESG investing topics.