Brunel’s Outcomes Report reviews 2021 RI themes and identifies a new priority: BIODIVERSITY

Biodiversity theme identified for its planetary and financial urgency
New commitments commit Brunel, managers and companies to integrate biodiversity into RI practices and data gathering
Key markers of progress across company engagement, women on boards, completion of listed market fund launches

Brunel has identified BIODIVERSITY as a new priority focus for its broader Responsible Investment mandate.

The new focus theme is laid out in its 2022 RESPONSIBLE INVESTMENT & STEWARDSHIP OUTCOMES REPORT, alongside longer-standing priority themes such as cyber risk, circular economy and climate change.

“Investors and corporations must recognise that accounting for biodiversity-related impacts is critical,” said Laura Chappell, Chief Executive Officer at Brunel Pension Partnership. “A final framework is coming down the line in 2023, so companies must start preparing for the impending reality of nature-related disclosure.”

The Brunel RI & Stewardship Outcomes Report, published this week, is the third successive Outcomes Report. It addresses a wide range of policy focus areas in order to gauge the level of Brunel’s success – and to identify where improvements can yet be made.

Biodiversity boost

Biodiversity particularly stood out in this year’s report as it had not previously been a separate priority. It highlights the urgency of the issue, citing research by IPBES showing that a million species are at risk from extinction in the coming decades and that, without action, extinctions will accelerate.[1]

It then demonstrates that the problem is also an investment risk. Swiss Re research shows that a fifth of countries are currently at risk of seeing their ecosystems collapse – and that 55% of global GDP is reliant on high-functioning ‘biodiversity and ecosystem services’.[2]

The recent launch of TNFD offers perhaps the first seeds of hope that investors could yet become part of the solution – if they make biodiversity an investment priority.

However, the complexity of the issue, coupled with the lack of standardised data, make progress difficult. Brunel’s new biodiversity strategy is set out on page 20 of the new report, detailing:

what we pledge to as an asset owner
what we expect of the asset managers we appoint to our funds
what we expect of high-risk companies

Integrating biodiversity is a challenge. Ultimately, however, its importance is universal, linking it to every other priority theme covered in the report – not least, climate change.

Markers of progress

Across the other themes the report reviews, highlights include:

38% female Boards of companies held in Brunel active portfolios – up from 34.4% in 2020
1,137 milestones EOS engaged with at 839 companies on our behalf
Completion of launches of all listed market funds with RI integration
1,322 company meetings at which votes were cast
Launch of the Asset Owners Diversity Charter by the Asset Owner Diversity Working Group (which is co-chaired by Brunel’s Head of Stewardship, Helen Price)

Faith Ward, Chief Responsible Investment Officer, Brunel Pension Partnership, said:
“The Outcomes Report is how we kick the tyres on our entire approach to Responsible Investment – to assess the effectiveness of our progress and whether we are delivering on our aims. We have an ongoing commitment to making improvements and to achieving best practice. It is crucial that we do this annually for two over-arching reasons. Firstly, RI is developing rapidly across the marketplace and so asset owners and managers must be nimble to respond. Secondly, our ambition is to build capacity across asset owners through sharing our own experience, so that our RI impact is amplified beyond our own AUM. The report reflects that core view that RI is a team game – within Brunel, across asset managers, and more widely in partnership with a range of industry groups. Examples of those partnerships – and their impact – is scattered through the pages of this report.”

For more information or to speak with a Brunel spokesperson, please contact:
Alex Monro, Head of Communications +44 (0)7483-026453 | alex.monro@brunelpp.org

[1] Global Assessment Report on Biodiversity and Ecosystem Services, Summary for Policy Makers, IPBES (2019)

[2] Swiss Re – Biodiversity and Ecosystems Services Index: measuring the value of nature https://bit.ly/3w1IIsK