Importance of biodiversity in investments: Why the threefold AB (AP3) considers diversity in the natural world when picking stocks.
University of Oxford Academic Highlights Importance of Addressing Biodiversity Risk to Combat Climate Change
In a recent development, Dr. Nicola Ranger, an academic at the prestigious University of Oxford, has emphasized the urgent need for asset owners to take action in addressing biodiversity risk due to its potential impact on climate change.
Dr. Ranger, a renowned expert in the field, has stated that the implications of biodiversity loss on climate change are severe. She compares the current state of biodiversity loss to a scorpion running towards us, suggesting that it has significant implications for climate change. The scorpion's sting, according to Dr. Ranger, would make climate change more severe and less predictable.
This warning comes as the Third Swedish National Pension Fund, AP3, has already taken steps to address this issue. In 2022, AP3 included biodiversity in its responsible investment policy. Fredric Nyström, head of sustainability and governance at AP3, expects companies in their portfolio to assess, manage, and report on biodiversity risks in a structured manner, aligning with the Taskforce on Nature-related Financial Disclosures recommendations.
AP3's latest stewardship report demonstrates the fund is pushing for improved biodiversity risk management at companies like PepsiCo, Home Depot, and Tyson Foods. As of the latest count, a total of 179 of AP3's engagements include biodiversity as a theme.
The urgency for asset owners is to map and address biodiversity risk. Biodiversity loss can amplify the effects of climate change, and climate change could become less predictable due to biodiversity loss. Asset owners need to recognise the severity of the situation and take action to mitigate these risks.
While the search results do not provide information about the name of the person who serves as Head of Sustainability and Administration at AP3, or about their recommendations regarding biodiversity-related risk management in companies, it is clear that AP3 is leading the charge in addressing this critical issue.
In conclusion, Dr. Nicola Ranger's warnings about the potential impacts of biodiversity loss on climate change cannot be ignored. Asset owners must take action to map and address biodiversity risk, as demonstrated by AP3's commitment to improving biodiversity risk management in their portfolio companies.
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