Virtual event on 8-9 December

#BusinessNatureSummit

Part 2

BRINGING ABOUT TRANSFORMATIVE CHANGE THROUGH COLLECTIVE ACTION AND FINANCE

Day 2 (9 December) from 10:00-16:00 CET

10:00-10:30 Opening keynote and presentation of the Finance for Biodiversity Pledge

10:30-11:30 Transforming financing: biodiversity, opportunities & risks for the financial sector

11:30-12:30 Creating new alliances to engage SMEs on biodiversity

Head of Natural Capital Impact

Strategy, HSBC Pollination Climate

Asset Management

Natureis Capital

Climate Asset Management

European Business & Nature SummitSession 5 – Martin Berg

9 DECEMBER 2020

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THE COVID-19 UNDERSCORED THE LINKAGES BETWEEN NATURE, OUR WELL-BEING AND THE ECONOMY

The importance of biodiversity and wildlife

Climate Asset Management | European Nature & Business Summit – Session 5 | 9 December 2020

• We are dependent on biodiversity and ecosystems, including for food security, medicine, clean water, raw materials and a stable climate

• Agriculture, forestry and land use make up nearly 25% of net global emissions

• The decline in biodiversity has been rapid and 1/8 of all species are threatened with extinction

% of species under threat out of the total species assessedSource: HSBC Global Research, Planet Lost? Why investors must address the biodiversity crisis, June 2020

SPECIES UNDER THREAT OF EXTINCTION

• To reach the goals of the Paris Agreement, we must find more sustainable market-oriented approaches to agriculture, forestry, land-use and other nature related investments.

• While biodiversity and ecosystems have received less attention compared to climate change, investors are increasingly asked to address both the biodiversity and climate crisis.

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Source: WEF Global Risks Report (2020), company announcements

IN RESPONSE TO THE RISK OF BIODIVERSITY LOSS LEADING CORPORATES ARE TAKING ACTION

Growing natural capital market momentum (1 of 2)

Biodiversity loss is increasingly being recognised as a significant risk to our economy; it was recently ranked by the World Economic Forum as one of the top 3 critical economic risks we are currently facing.

BIODIVERSITY LOSS

21 SEPT 2020 9 DEC 2020

BUSINESS FOR NATURE FINANCE FOR NATURE

more than 560 companies call on governments to reverse nature loss, including Walmart, Citigroup, Microsoft, Hitachi, IKEA, Unilever, AXA, and H&M

37 financial Institutions, including HSBC, with combined €4.8 trillion AuM call on global leaders to agree on effective measures to reverse nature loss in this decade

21 SEPT 2020 21 SEPT 2030 28 SEPT 2020

WALMART TO BECOME A REGENERATIVE COMPANY

MICROSOFT’S DIRECT OPERATIONS TO BE WATER POSITIVE

BRAMBLES’ TO BECOME NATURE-POSITIVE

by protecting, managing or restoring at least 50m acres of land and 1m miles2 of ocean by 2030.

by reducing water use intensity and replenishing water in water- stressed regions in which it operates.

including by restoring forests

In response, many net zero commitments that large corporates are making include a number of natural capital and biodiversity initiatives and targets.

Climate Asset Management | European Nature & Business Summit – Session 5 | 9 December 2020

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UNDERPINNED BY AN INCREASINGLY SUPPORTIVE POLITICAL AND REGULATORY BACKDROP

Growing natural capital market momentum (2 of 2)

We are seeing an increasingly supportive international political backdrop.

Political leaders participating in the UN Summit on Biodiversity in September 2020, representing 76 countries from all regions and the European Union, have committed to reversing biodiversity loss by 2030:

“No net loss by 2030 in the area and integrity of freshwater, marine and terrestrial ecosystems, and increases of at least [20%] by 2050, ensuring ecosystem resilience”

“We, political leaders participating in the UN Summit on Biodiversity … have come together … to send a united signal to step up global ambition for biodiversity and to commit to matching our collective ambition for nature, climate and people with the scale of the crisis at hand…”

An initiative to establish a Taskforce on Nature-related Financial Disclosure (TNFD) was announced in July 2020.

The coalition of partners supporting and establishing the TNFD include Global Canopy, UNDP, UNEP Finance Initiative and WWF.

It is supported by many financial institutions as well as the governments of UK, France, Netherlands and Switzerland. Launch of TNFD is planned for early 2021 and will be tasked with delivering a framework to guide nature-related financial disclosure by the end of 2022.

OUTPUT:

Reporting frameworks for financial institutions that will enable them to better understand their risks, dependencies and impacts on nature.

GOAL:

To increase the resilience of the global economy by reducing flows of finance that are negative for nature and people, and to increase finance towards outcomes that are positive.

Climate Asset Management | European Nature & Business Summit – Session 5 | 9 December 2020

Transforming financing: biodiversity, opportunities & risks for the financial sector

9 December from 10:30-11:30 CET

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#BusinessNatureSummit Joris van Toor

Policy Advisor at the Supervisory Policy Division, De Nederlandsche Bank

Indebted to natureExploring biodiversity risks for the Dutch financial sector

Joris van Toor

Relationship between biodiversity and the financial sector

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Physical risks: dependency on ecosystem services

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Transition risks: activities in biodiversity hotspots

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#BusinessNatureSummit Peter van der Werf

Senior Engagement Specialist, Robeco

Marketing materials for professional investors, not for onward distribution

Why should the financial industry take action?

Financial risks and opportunities linked to biodiversity

Peter van der Werf – Director, Active Ownership

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> Humanity has already wiped out 83% of wild mammals and half of all plants and severely altered three-quarters of ice-free land and two-thirds of marine environments.

> Ecosystem services total global value amounts to USD 125-140 trillion per year, equivalent to one and a half times the volume of global GDP.

> Species extinctions 10-100 times higher than the natural rate

> Failure to achieve Aichi Biodiversity Targets by 2020.

Why biodiversity loss matters?

Source: Steffen, Will, et al. “Planetary boundaries: Guiding human development on a changing planet” (2015)

Planetary boundary ‘Biosphere integrity’ is beyond the zone of uncertainty.

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Which sectors depend the most on nature?Financial materiality of biodiversity

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Combination of production and consumption changes can reverse biodiversity loss, and be a large part of the climate solution

Biodiversity loss can be reversed

Source: IIASA based on Leclère, David, et al. Nature (2020)

> Restoring only 15% of converted lands in priority areas could avoid 60% of expected extinctions while sequestering 299 gigatonnes of CO2—30% of the total CO2 increase in the atmosphere since the Industrial Revolution. Strassburg et al. (2020), Nature

> Calls for Paris-like political target for biodiversity (e.g. max 20 extinctions per year). E.g. Rounsevell, et al. (2020) Science

> Only 5% of climate financing is currently directed towards nature-based solutions.

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Engaging on biodiversity loss linked to commodity-driven deforestationHow are we taking action?

Source: Living Planet Report, WWF (2020)

Source: Ceres – The Investor Guide to Deforestation and Climate Change (2020)

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Engaging on biodiversity loss linked to commodity-driven deforestationHow are we taking action?

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Finance for biodiversity Pledge & Internal Biodiversity TaskforceHow are we taking action?

> During the Biodiversity Summit of the United Nations General Assembly on September 30th, 2020, Robeco and 25 other financial institutions launched the Finance for Biodiversity Pledge, which calls on global leaders to agree on effective measures to reverse nature loss in this decade to ensure ecosystem resilience.

> By signing the Pledge, Robeco took the following commitments, to be delivered by 2024:

The Finance for Biodiversity Pledge

Robeco’s internal Biodiversity Taskforce

> To work on delivering the commitments included in the Pledge, Robeco set up an internal Biodiversity Taskforce, chaired by our climate strategist Lucian Peppelenbos.

> Mandate: developing a roadmap to quantify the positive and negative impacts of our investments on biodiversity, aiming to set concrete targets to reduce the negative impacts (and increase the positive ones) by 2024.

Collaborating and sharing knowledge;

Engaging with companies;

Assessing impact;

Setting targets;

Report publicly on progress.

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#BusinessNatureSummit

Robert-Alexandre PoujadeESG analyst, BNP Paribas AM

EUROPEAN BUSINESS & NATURE SUMMITSESSION 5: TRANSFORMING FINANCING: BIODIVERSITY, OPPORTUNITIES & RISKS

FOR THE FINANCIAL SECTOR

ROBERT-ALEXANDRE POUJADE, ESG ANALYST

09/12/2020

For Professional and Institutional Investors only. Not for further distribution.

Of which AUM1: EUR 68 billion in

Our sustainable investment approach

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1. As of 06/30/2020. The four pillars of our sustainable investment approach don’t apply to some of our AUM,

such as mainstream passive/ETF and some assets delegated to external or affiliated managers.

2. ESG: Environmental Social and Governance

3. Enhanced ESG + Thematic = Fund of funds that invests in enhanced ESG funds and thematic funds

Source : BNP Paribas Asset Management, October 2020

A firm-wide approach to sustainable investment, based on five pillars

1. ESG2 Integration across

all investments

2.Stewardship

(Voting, engagement)

4. Forward Looking

Perspective:

The ‘3 Es’ 3. Responsible business

conduct expectations &

product-based exclusions

4 pillars of

SUSTAINABLE INVESTMENT

(BNPP AM total AUM1: EUR 428 bn)

Enhanced ESG(Multi factor, Best in Class, ESG index etc…)

41.8 billion euros – 84 funds

Thematic(Water, Climate, Environment, sustainable food, Human

development etc..)

13.3 billions euros – 28 funds

Impact(Green bonds, Social investment etc..)

0.9 billions euros – 3 funds

Enhanced ESG + Thematic3

12.4 billion euros – 15 funds

For Professional and Institutional Investors only. Not for further distribution.

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Incorporating biodiversity into our ESG integration and stewardship

Our ESG analysis and engagements were published as Natural Capital Coalition case studies, the latest being:

Engagements on seafood sourcing and

plastic/packaging

• Approach: Analysis of consumer companies

regarding seafood sourcing and

plastic/packaging strategies.

• Outcome: Our analysis led to bonus/malus

applied to the companies’ ESG score,

triggering changes in ESG recommendations,

both upwards and downwards

• Two-level engagement with companies:

• Ex-ante: to carry out the assessment

(interviews, fact-finding)

• Ex-post: using the assessment to promote

adoption of best practices by companies

Source: BNPP AM, November 2020. Trademark, copyright, and other intellectual property rights are and remain the property of their respective owners.

BNPP AM’s dependencies on ecosystems services per euro invested*

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Source: BNPP AM, June 2020, ENCORE

*This is a preliminary assessment. Partial view of BNPP AM’s current corporate investments (equities, fixed income). View by GICS sectors. Figure does not include the Financials sector.

Sectors Categories of

ecosystem

services

Ecosystem services

For Professional and Institutional Investors only. Not for further distribution.

Direction of travel to “bend the curve” of biodiversity loss

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Source: BNPP AM, November 2018, Exploration of the biodiversity footprint of

portfolios, Global Biodiversity Score calculations (CDC Biodiversité)

Source: Planetary Boundaries,

J. Lokrantz/Azote based on Steffen et al. 2015.

Carbon footprint

Green Share

Forest footprint

Water footprint

PR

IOR

ITIE

SR

EP

OR

T

Source: BNPP AM, November 2020

For Professional and Institutional Investors only. Not for further distribution.

BNP PARIBAS ASSET MANAGEMENT

14, rue Bergère

75009 Paris

bnpparibas-am.com

#BusinessNatureSummit Thomas van Craen

Managing Director, Triodos Bank Belgium

Thomas Van Craen – Managing Director Triodos Bank Belgium

The role of the financial system in the reversal of biodiversity loss

EUROPEAN BUSINESS AND NATURE SUMMIT - 9 DECEMBER 2020

How can the financial system reverse biodiversity loss?

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Biodiversity declines at increasing pace. Main causes stem from human activity. The consequences for humankind are severe. Conscious decisions and actions by financial institutions can help reverse this trend.

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Why does this matter to Fis?

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Consequences for FIsWhat can Fis do?

Actions by FIs

EUR 510,000,000,000

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EUR 96,000,000,000 EUR 81,000,000,000 EUR 28,000,000,000

Dutch FIs provided worldwide EUR 510 bln in finance to companies that are highly or very highly dependent on one or more ecosystem services.

Amount for which Dutch FIs have invested in, or extended loans to, companies involved in environmental controversies with negative consequences for ecosystem services or biodiversity.

Sectors with nitrogen-emitting activities represent a significant transition risk to banks. The exposure of the three large Dutch banks to such sectors amounts to EUR 81 bln.

Exposure of Dutch FIs to companies operating in areas that are protected or that might come under protection.

Exposure to biodiversity is broad, and very deeply intertwined within credit and investment portfolios

Data from DNB – analysis of worldwide activities of Dutch FIs

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FIs materially exposed to

- Companies (at least partly) dependent on ecosystem services

- Companies with adverse impact on biodiversity

Biodiversity loss is increasingly recognised as a threat to financial stability

Source: DNB

Actions by Financial Institutions: what can (& should?) we do?

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FIs to take responsibility of own decisions

Every financial decision has an impact: positive or negative

€

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Commit to change

Measure and report transparently

Adapt lending and investment practices

Advocate

FIs can act on at least four levels

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Commit to change

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Reasons to join this open source initiative: develop a metric, facilitate uptake of topic, inform investment decisions, move focus to positive impact, …

Partnership for Biodiversity Accounting Financials (PBAF) to develop a new accounting standard for biodiversity.

Biodiversity footprint will be developed for different asset classes: (sovereign) bonds, listed equities, project finance, mortgages, …

Measure and report transparently

PBAF includes the analysis of pressures induced by the economic activity

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Measured in ‘potentially disappeared fraction of species per square meter per year’ or PDF.m2.yr

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Triodos Bank published in 2019 for the second year its carbon footprint of loans and investments

PCAF = Partnership Carbon Accounting Financials.

Next steps: improve data quality and set targets (SBT)

PBAF builds on successful cooperation in PCAF

2019 Annual Report Triodos Bank

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3 levels:- Product- Process- Precautionary

First step: agree on minimum standards

Examples:- Production of fossil fuel energy- Use of species that are on the

endangered species list- Policies on GMO or biodiversity

Adapt lending and investment practices

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Through broad stakeholder engagement, Triodos Bank developed vision papers

Second step: develop understanding on required positive change

Basis for decisions, internal policies, product development, and stakeholder engagement

‘Reset the economy’‘Towards a low carbon economy’‘Towards ecologically and socially resilient food and agriculture systems’

Adapt lending and investment practices

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Natuurpunt is a civil society organisation based in Flanders. It stands up for nature and biodiversity, and for the right of all people to this in their local area. They aim for the protection of open space and the quality of the environment.

Natuurpunt counts 90,000 members and 6,000 volunteers. It purchases and managers hundreds of natural reserves.

As a sheltered workplace, they embody the interdependence of the ecological and social dimensions of sustainability.

Natuurpunt is a longstanding relationship of Triodos Bank in Belgium. We have financed the sustainable renovation of their main building in Malines.

Biodiversity as discriminant when extending new loans

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Triodos Bank advised the UK Environmental Agency (EA), the UK Department for Environment, Food and Rural Affairs (Defra), and the Esmée Fairbairn Foundation (EFF) in the creation of a GBP 10 m Investment Readiness Fund.

The Fund is aimed at developing nature based investments, such as nature restoration projects.

Advisory work leading to financial innovation

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Partnership with Rewilding Europe, an organisation with the aim to make Europe a wilder place, with more space for wild nature, wildlife and natural processes, and as a result bring back the variety of life.

Alongside the European Investment Bank and the European Commission, Triodos, through its catalytic investment arm Triodos Regenerative Money Centre, has extended a facility allowing Rewilding Europe to provide low-cost loans to estate owners to generate positive rewilding impact.

Catalytic investments between gift money and venture capital

Linnunsuo wetland - Finland

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Example:Joint statement with partners on the discrepancies between the Green Deal and the proposed CAP.

“Homo sapiens, it turns out, is the most cooperative species on the planet, outperforming ants, hyenas, and even the naked mole-rat when it comes to living alongside those who are beyond our next of kin.” – Kate Raworth

Advocacy is needed to raise awareness, foster partnerships and create change

“Humans are very adaptable: we can still fix this [climate

and ecological catastrophe]. But the opportunity to do so

will not last for long. We must start today.”

Greta Thunberg, climate activist UK Houses of Parliament – April 2019

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• European Environmental Agency – State of Nature in the EUState of nature in the EU — European Environment Agency (europa.eu)

• Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES) – Special Report: Nature’s dangerous decline is unprecedented, but it is not too late to actSpecial Report: Nature’s dangerous decline is unprecedented, but it is not too late to act | IPBES

• Partnership Biodiversity Accounting FinancialsThe PBAF partners cooperate in the development of harmonized principles underlying biodiversity impact assessment | PBAF - Partnership for Biodiversity Accounting Financials (pbafglobal.com)

• Partnership Carbon Accounting FinancialsPCAF: Enabling financial institutions to assess greenhouse gas emissions | PCAF (carbonaccountingfinancials.com)

• DNB – Indebted to natureDNBulletin: Indebted to nature - De Nederlandsche Bank

• Triodos Bank Vision Paper: Reset the Economy – An agenda for a resilient and inclusive recoveryTriodos Bank proposes concrete agenda for resilient and inclusive recovery

• Triodos Bank Vision Paper: Towards ecologically and socially resilient food and agriculture systemsTriodos Bank calls for complete change of food and agriculture systems (triodos-im.com)

• Triodos Bank Minimum Standards[PDF] Minimum Standards - Triodos Bank triodos.com/downloads/about-triodos-bank/triodos-banks-minimum-standards.pdf

• Finance for Biodiversity PledgeHome - Finance for Biodiversity

References

Thanks!See you in the next session at 11:30-12:30 CET

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