Launch of “Nature Action 100” accelerates investor biodiversity focus

Here is news from Wachtell Lipton’s Carmen Lu and Allison Golden:

This week, Nature Action 100, an investor coalition comprising 190 institutional investors representing $23.6 trillion in assets under management, unveiled its inaugural list of 100 companies for engagement to combat nature loss.  Companies selected for engagement have been drawn from eight sectors deemed key drivers of nature loss due to their large impacts on habitat loss, overexploitation of resources, and soil, water, and solid waste pollution.  Focus sectors include consumer goods, food and beverage, biotechnology and pharmaceuticals, chemicals, forestry, and metals and mining.  The selected companies have been urged to, among other actions, establish board oversight over, and set targets informed by, assessments of nature-related dependencies, impacts, risks and opportunities.

The launch of Nature Action 100 is the latest development in the accelerating investor and regulatory focus and action on identifying and addressing the impacts of biodiversity and nature loss.  Earlier this month, the Taskforce on Nature-related Financial Disclosures (TNFD), an initiative led by executives from companies and financial institutions representing over $20 trillion in assets under management, published its final recommendations on nature-related risk management and disclosure.  Drawing on the same four reporting pillars—governance, strategy, risk and impact management, and metrics and targets—established by the Task Force on Climate-related Disclosures (TCFD), TNFD seeks to further the goals of the Kunming-Montreal Global Biodiversity Framework adopted at COP 15 last year.  The TNFD recommendations have also been designed to be interoperable with biodiversity disclosure standards expected to be released by the International Sustainability Standards Board (ISSB) as well as the European Sustainability Reporting Standards (ESRS) adopted by the European Commission in July.

Proxy advisors have also begun to pay closer attention to biodiversity risks.  In its 2023 Global Benchmark Policy Survey, Institutional Shareholder Services (ISS) asked participants whether global or market-specific principles and policies ought to be adopted with respect to biodiversity.  And while BlackRock and State Street are not participants in Nature Action 100, both issued recent guidance on their approaches to nature-related issues.  Looking ahead, companies in sectors with critical or outsized nature-related dependencies are well-advised to assess and better understand such exposures and engage with and inform stakeholders of responsive actions.