The Natural Value Initiative e-newsletter
The Natural Value Initiative is delighted to share with you the first investor focused toolkit to focus exclusively on the impacts and dependence of companies on biodiversity and ecosystem services. Designed to evaluate investment risk and opportunity associated with biodiversity and ecosystem services impacts and dependence in the food, beverage and tobacco sector, it offers investors unprecedented access to information on corporate risk management for an issue gaining rapidly in importance.
We used one of the key elements of the toolkit – the Ecosystem Services Benchmark - to evaluate 31 companies in the food, beverage and tobacco sector. The results of this analysis demonstrate to investors what current practice looks like and what best practice might be. We congratulate the companies which led their sectors: SABMiller and Foster’s (beverages), Marks and Spencer (retailers), Unilever (processors), United Plantations (producers) and British American Tobacco (tobacco). It was encouraging to see an array of exciting and innovative activities underway to tackle sustainable sourcing issues, many in partnership with civil society. However, despite the range of activity underway, very few companies could demonstrate the link between activities undertaken and a comprehensive risk and opportunity assessment that encompassed biodiversity and ecosystem services. More strategic, risk focused activity is needed if companies are to understand and manage this issue effectively – and communicate that they are doing so to investors.
Recognising that biodiversity and ecosystem services is moving up the policy agenda, we encourage investors to build capacity to engage on the issue and challenge their investments on their performance. Companies are advised to disclose more fully on the issue and put in processes to allow a better understanding and management of their company’s impacts and dependence on biodiversity and associated risk exposure. By doing this, we believe they can gain competitive advantage.
We are proud of the Ecosystem Services Benchmark and believe it can add great value to investment analysis. However, we know this is only a small step towards an investment decision-making system that adequately values ecosystem services. The next challenge for us is to integrate the findings of the Benchmark into mainstream investment analysis.
To quote Bob Welsh, CEO of a leading Australia pension fund VicSuper, and one of our collaborators on this initiative, “The decline in ecosystem services is the next big challenge for society and business”. We encourage companies to rise to this challenge and address some of the weaknesses raised by the Natural Value Initiative’s survey and stand ready to provide companies with assistance in this journey.
Project Director, the Natural Value Initiative
Many thanks to Strategic Environmental Consulting for their work in developing the early stages of the benchmark. We are also grateful to the members of our Steering Committee and to the following individuals and organisations for their contributions to the development of this toolkit: Robert Barrington, Jack Foxall, F&C Asset Management Ltd, Imperial Tobacco, Monica Harris, Kerry ten Kate, Pax World, SABMiller, Sainsbury’s, Graham Sinclair of Sinclair & Company, Unilever and VROM. Throughout this document we have drawn from the excellent work conducted by the World Resources Institute, Meridian Institute and World Business Council for Sustainable Development set out in the Corporate Ecosystem Services Review. We are grateful also for the financial assistance provided by the Netherlands Ministry of Housing, Spatial Planning and the Environment (VROM) and UNEP Finance Initiative for this project.