The strategy of protecting the nature of an investor group is simple. They choose 100 businesses that are burdensome to nature. After that, give them guidance on how to minimize their influence on nature. By the way, they keep track of their progress.
This would be the goal of the “Nature Action 100” campaign. Eleven investment firms unveiled their plan yesterday in an effort to persuade businesses to support the preservation of ecosystems. It is in businesses’ interest to keep nature clean. These ecosystems support more than half of global economic output.
Protecting nature means smart business
According to Columbia Threadneedle Investments’ global head of responsible investment, Claudia Wearmouth, safeguarding supply networks that depend on natural resources is simply smart business.
Wearmouth stated in a release that the goal of Nature Action 100 is to include the corporations that have the biggest impact on nature. They aim not only to conserve the environment but also to reduce the risks these corporations face from rising pressure to adequately manage biodiversity challenges.
The top 100 businesses will be revealed the following year.
The goal of the U.N. environmental meeting in Montreal is to reach a global accord by December 19 on measures to safeguard endangered species and diminishing wild areas.
According to a draft of the hoped-for final agreement, corporations would be required to evaluate and disclose any environmental impact resulting from their operations and investments. It may include their supplier chains and portfolios.
Some businesses may find these reporting obligations burdensome, according to analysts.
Who is involved in protecting nature?
According to the group, Nature Action 100 would aim to choose 100 businesses for investors to concentrate on. They aim to advise how the private sector can comply with any new regulations. Also, they will track their progress.
As Stephanie Pfeifer, CEO of the Institutional Investors Group on Climate Change, one of the organizations leading the new initiative said, the impact that businesses have on the environment is currently difficult to quantify. This limits the extent to which investors can engage with businesses on this important issue.
AXA Investment Managers, BNP Paribas Asset Management, Church Commissioners for England, Domini Impact Investments, Federated Hermes Limited, Karner Blue Capital, Robeco, Storebrand Asset Management, Christian Brothers Investment Services, and Vancity Investment Management are the other investment firms behind the scheme.
Fear of investors
Investor relations is typically viewed as a one-way street by firms. Fewer than 6% of the companies surveyed by Bain & Company about their investor relationship management practices have a formal structure in place to link investor relations with strategy and best utilize investor feedback.
This is despite the fact that the majority of them communicate with investors at least monthly and segment their investor base for differentiated emphasis in communications.
Investors, however, may be an effective strategic resource, offering not just money but also an unbiased perception of the risks and possibilities that a company faces. Such in this case with protecting nature. It will be a double benefit.