A portfolio analysis of nature impacts
It is long-past time investors confronted head-on the fact that human activity has caused devastating consequences for the planet, with serious implications for long-term value creation—and destruction. We see this not only from a climate change perspective, but also through the wider lens of nature: the effects of deforestation and land use change, water pollution, disrupted natural habitats and even species extinction—to say nothing of the unknown impacts yet to arise. These impacts are all-but guaranteed to multiply and intensify, with the systemic risk to investment portfolios growing larger and less diversifiable with each passing day.
NEI has integrated many nature-related topics into its corporate engagement and policy work, such as biodiversity, deforestation, Indigenous issues, waste, water, and circularity. As the investment community deepens its focus on these and other topics, we are seeking to tighten our approach, understand our exposure, and mitigate risks to our portfolio.
This paper is made up of three parts.
- PART 1: We define key terms and explain why nature is a material consideration for businesses and investors.
- PART 2: We provide a snapshot of our exposure to the industries with the highest impacts and dependencies on nature.
- PART 3: We explain the components and build-out of our assessment framework and share preliminary findings, offering ideas about where to go from here.
