What's the buzz around biodiversity?

I love bees. In fact, my house is filled with bee “things” – from candles and drip mats to calendars and glasses cases. Bees are beautiful, hardworking creatures and there are more than 20,000 different species of them around the world.

But bees are not only beautiful and hardworking; they’re also critical to the future of our planet, being vital pollinators of flowers and crops. From cucumbers and turnips through to tomatoes, coriander and cashew nuts, bees are a critical part of our ecosystems and our food chains.

Like many other creatures, bees are under threat from the damage humans are inflicting on our planet. The biggest single cause of bee decline is the intensification of farming. This is made worse by the increased use of pesticides which is having a devastating impact on wild bees. This in turn, will impact crop yields. Indeed, estimates from Friends of the Earth show that it would cost UK farmers around £1.8bn to pollinate their crops without bees.

And that financial impact of biodiversity loss is no different in our oceans. As my fabulous colleague Andre Ranchin points out “The 'blue economy,' valued at $2.5trn annually, encompasses marine activities such as renewable energy, shipping, tourism, fishing, aquaculture, and blue technology, making oceans the seventh-largest economy by GDP with assets estimated at $24trn. A sustainable blue economy offers investment opportunities and substantial environmental benefits”.

So, challenges and opportunities both exist, and pension schemes are in a key position to influence how the loss of biodiversity is controlled and potentially reversed. A lot of trustee time has been spent over recent years examining climate change and the impact that this could have on financial outcomes. Biodiversity is inextricably linked to climate change, and we believe trustees need to carve out time in their busy agendas to think about this too. The Taskforce on Nature Related Financial Disclosures (TNFD) is a market-led, science-based, government backed initiative that provides organisations with the tools to act on evolving nature related issues. The final version was published in September 2023. Whilst the Taskforce on Climate Related Financial Disclosures (TCFD) are now mandatory for UK pensions of a certain size, TNFD remains (for now) a voluntary disclosure framework.

There’s lots that trustees can do to be proactive in this area and I’ve shared just a few of these below:

• Education Get biodiversity training on your agenda and understand both the challenges and opportunities this will bring for your portfolio.

• Engagement Speak to your fund managers about how they’re factoring biodiversity issues into their portfolios and ask them to give examples of the positive impact they’ve made through their engagements with companies.

• Measurement Consider what measures you can use to understand the impacts and dependencies of your asset portfolios of biodiversity. Initial areas for consideration could include sectors with high nature dependencies and the key locations which are diversity hotspots.

• Collaboration Explore how you might work alongside other investors or organisations to improve understanding of the issues.

• Review the opportunities It’s not too late to reverse the loss of biodiversity. Explore what investment opportunities exist and consider investment funds and strategies that explicitly aim to have a positive impact on biodiversity loss.

As the days become longer and we all start to enjoy the outdoors more as summer approaches, please don’t forget that we all have a part to play in reducing biodiversity loss. And in the meantime, I’ll continue to plant “bee bombs” in the garden to attract my favourite buzzing friends!

If you want to discuss anything covered in this blog, please get in touch. 

This blog is based upon our understanding of events as at the date of publication. It is a general summary of topical matters and should not be regarded as financial advice. It should not be considered a substitute for professional advice on specific circumstances and objectives. Where this blog refers to legal matters please note that Hymans Robertson LLP is not qualified to provide legal opinion and therefore you may wish to obtain independent legal advice to consider any relevant law and/or regulation. Please read our Terms of Use - Hymans Robertson.