Mounting evidence of the financially material impact of biodiversity is raising concern among many stakeholders, including investors and consumers, and prompting changes in the regulatory and legal environment. Understanding the impact of biodiversity loss on asset prices, corporate value, and, by extension, investment outcomes is nascent, and lack of reliable data remains a hurdle to measurable action. Nonetheless, Wellington’s ESG Research Team believes market participants need to consider and account for the costs of biodiversity loss and the benefits associated with ecosystem preservation.
Our team aims to integrate biodiversity into our research and stewardship approach, just as we do with climate change. And, as with climate change, we prefer engagement as the primary means of helping companies and issuers understand the related risks and opportunities. We consider how companies address material biodiversity risks in our proxy votes as well, and we will continue to evolve our approach to this complex subject. Here we share recent examples of our efforts to assess companies’ risk exposure to biodiversity and better understand their plans mitigate it.