First Sentier Investors has launched a nature and biodiversity guide for institutional investors to identify, assess materiality and responses to nature and biodiversity risks in portfolio companies.
The guide, titled ‘Investors Can Assess Nature Now’ provides a step-by-step outline, including which resources can be used at each step, for investors to undertake nature-related company assessments and develop engagement approaches to biodiversity risks. Focusing specifically on freshwater and forests, FSI says the guide will help bridge the gap between the framework outlined by the Taskforce on Nature-Related Financial Disclosures (TNFD), and the practicalities of navigating the data available.
The guide maps a due diligence framework for appraising and engaging on three critical issues; firstly, identification of sector exposures and understanding of material nature pressure areas; secondly, prioritisation and assessments of companies, including due diligence, metrics to look for and country-level assessment; and thirdly, company engagement, outlining how to interpret the data and questions to ask.
Kate Turner, Global Head of Responsible Investment at First Sentier Investors, says, “There is growing global momentum to address nature and biodiversity risks, however the topic is still relatively new for many investors. While there is a data challenge, knowing what tools are available and when to use them can also be a roadblock. This guide provides an outline of the available resources for assessments, including raising alternate ways to navigate data issues.”