Large Asia asset owners join push to lobby global firms on nature risks
Some of Asia’s largest asset owners have backed an initiative to directly lobby 60 global companies that pose acute nature-related risks, pushing them to engage directly with governments.
Several of Japan’s largest insurers, including Sumitomo Life Insurance, Nippon Life Insurance, Dai-ichi Life Insurance, and Daido Life Insurance, as well as Future Super, the $1-billion Australian super fund, are on a list of investors named by Principles for Responsible Investment (PRI) June 25 as part of a new stewardship initiative targeting nature and deforestation, formally known as Spring.
“What we’re seeing today from investors is a recognition of the importance of nature when managing material investment risks, including deforestation and biodiversity loss, when aligned with their individual fiduciary duty,” said David Atkin, PRI’s chief executive officer, announcing the launch at the London Climate Action Week.
He added that the initiative was suited to investors who look to manage financially material nature-related risks, as well as investors looking for sustainability outcomes, in line with their fiduciary duty.
APAC TARGETS
Asia-Pacific companies are among the 60 that will be targeted by the investors, including Australian mining giant BHP Group, Singapore agricultural commodities conglomerate Olam Group, and Japan’s Fuji Oil Holdings, which produces food ingredients. The full list of companies has also been published on the PRI’s website.
PRI, which is supported by the United Nations, is the world’s leading investor network devoted to responsible investing, with members collectively responsible for $120 trillion in assets.
A total of 204 investors among the PRI’s 5,000 institutional members have been named as publicly supporting the Spring initiative on the PRI’s website. They collectively account for $15 trillion.
Beyond Asia, signatories to the Spring initiative include pension funds and institutions with significant APAC allocations, including Canadian pension fund Caisse de dépôt et placement du Québec (CDPQ), and Pension Denmark.
Brett Morgan, superannuation funds campaigner for Market Forces, an affiliate of Friends of the Earth Australia, which lobbies the financial sector for better environmental outcomes, said that investors have an obligation to join initiatives like Spring in order to push forward their responsibilities to the environment and their pensioners.
“Managing climate- and nature-related risks is crucial for long-term investors like pension funds to live up to their fiduciary duties and ensure a stable retirement for their beneficiaries.”
POLITICAL LOBBYING
Investors supporting Spring will prioritise lobbying companies to engage politically for environmental outcomes. Alongside business operation and risk management and supply chain management, this is one of three areas identified as priorities by the PRI.
Oshadee Siyaguna, senior thematic investment analyst at Regnan, an Australian sustainable and impact investment management company, welcomed the political dimension to the new engagement.
“We [recognise] the importance of responsible political engagement, a key focus of the initiative, in delivering meaningful policy responses to enhance the resiliency of ecological, social, and economic systems,” she said at the launch. Regnan is a member of the advisory committee to Spring.
But the new initiative faces growing concern among investors this year that sustainability objectives could conflict with fiduciary duties. Sustainability-focused investing has also faced criticism in the US from Republican politicians, who accuse advocates of vilifying the fossil fuel sector.
Earlier this year, three of the world’s largest asset managers, BlackRock, State Street Global Advisors and JP Morgan Asset Management, either pulled out of or significantly scaled back their contribution to Climate Action 100+, an investor-led climate initiative representing investors with more than $65 trillion.