Asset owners eager to step up biodiversity coverage

An asset owner-led platform will include data on the companies and investment it covers by the third quarter of 2024 amid growing attention on biodiversity.
Asset owners eager to step up biodiversity coverage

In response to pressure from its investors, including those in the Asia Pacific, the world’s leading asset-owner led sustainable investing platform, co-founded by Australian Super, will enhance its coverage of biodiversity and natural capital by the third quarter of 2024.

James Leaton, head of research at the Sustainable Development Investment Asset Owner Platform (SDI AOP), said that addressing investors’ demand for more detailed information of their investments’ impact on biodiversity was one of two principal focus areas for AOP this year, the other being improving coverage of unlisted assets.

“A lot of investors are thinking about the biodiversity theme and this is another area we have been reviewing this year,” he said.

James Leaton

While companies are keen to talk about their efforts, frequently claims are exaggerated, so designing an independent measurement framework to quantify the impact remains challenging, Leaton noted.

“We have to cut through the green marketing which is not usually proportional to the level of activity,” he said. “That is why we are also looking at R&D efforts to get other signals of which companies are more active in key technologies.”


Leaton said that enhancing the coverage with procedures that investors could rely on was a lengthy process requiring several stages. 

“The cycle of improvements takes a while. So, we have done the research and review this year to define what we want to include, and what is not yet captured in the data and taxonomy. Any changes/ additions then get implemented through next year in terms of collecting the data and quality assurance, before it makes it into the product, that is delivered to users in Q3 of next year.”

Sandra Silea, associate director, ESG and stewardship, at Australian Super said this would expand AOP’s existing biodiversity thematic that touches on several SDG goals and sub-goals.

“The SDI approach ascribes a positive contribution to companies that are gaining revenue from biodiversity positive activities. This enables asset owners to identify the positive contribution their investee companies are making to particular SDGs, such as zero hunger, good health and well-being and responsible consumption and production,” she said.

The AOP was founded by AustralianSuper, PGGM, APG and Canada’s British Columbia Investment Management Corporation (BCI) in 2020; today, its asset owner members collectively account for $1.5 trillion AUM.


While a lot of attention by investors so far has focussed on the harmful risks their investments could pose to biodiversity, SDI AOP’s starting point is to identify companies and investments whose goods and services will improve it, as well as evaluating any negative impacts from those it has already selected as being suitable sustainable investments.

“Whereas much investor focus is towards the biodiversity risks and dependencies associated with their portfolios on the operational side, we’re looking at the positive impacts and opportunities under the TNFD framework,” he said, referring to the Taskforce on Nature-related Financial Disclosures (TNFD), a UK-based organisation whose members collectively account for more than $20 trillion in assets.

The taskforce has developed a set of disclosure recommendations and guidance to help organisations towards nature-positive outcomes.

“We’re reviewing what we already have and what might need capturing in the future,” Leaton added.

Hans Op't Veld

SDI AOP’s ESG taxonomy analyses 10,216 equity and bond issuers to identify those whose products or services contribute to the UN Sustainable Development Goals (SDG), providing asset owner members with an investible universe of equity and fixed income assets.

Hans Op’t Veld, chair of the markets and members committee of SDI AOP, and principal director for responsible investments at PGGM Investments, referred to the platform’s recent efforts to survey members globally on their requirements for the platform.

This includes an event in Tokyo in October to coincide with the UN’s three-day ‘PRI (Principles of Responsible Investment) in person’ conference there, pointing to the expansion of coverage and membership for the platform.

“Two things to highlight in the development of the platform are the proliferation of the user base and the addition of information. The growth of the user base indicates to us that the approach that we have been taking is gaining traction,” he said.


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