ESG Focus Areas
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Engagement Case: SBTN Target Setting In 2025, we engaged with several companies on the topic of setting nature-related targets, with a particular focus on the Science Based Targets Network (SBTN). As long-term investors, we encourage companies to adopt forward-looking and, where possible, quantifiable targets to reduce environmental impact and support the transition to more sustainable busi- ness models. We emphasize that using recognized frameworks such as SBTi and SBTN enhances comparability, supports sector alignment, and enables companies to credibly communicate their ambitions to stakeholders. Through multiple interactions during the year, we discussed SBTN target setting primarily with companies we consider potential frontrunners within their sectors. These companies operate in nature-relevant industries and have prior experi- ence with climate target setting, including SBTi commitments. While we expected this experience to support progress on biodiversity targets, all companies indicated that they are not yet ready to commit beyond initial steps such as assessment and prioritization. The discussions highlighted that, although interest is growing, implementation remains at an early stage. We observed that companies face several challenges in progressing towards SBTN targets. Key barriers include the com- plexity of methodologies, significant data requirements, and uncertainty around the business case for adopting nature- related targets. In some cases, companies also expressed concern that required actions could conflict with core business activities. Despite these challenges, we note ongoing developments in the SBTN framework, including new validation mile- stones introduced in 2025 to support companies in demonstrating progress. Overall, this engagement has strengthened our understanding of how companies approach biodiversity target setting. While adoption remains limited, with only a few companies having publicly available SBTN targets, we will continue to engage with investees to encourage progress and support the integration of nature-related considerations into corporate strategies.
Policy Support Investors Policy Dialogue on Deforestation (IPDD)
Outlook Despite the knowledge that almost all economic activities are linked to natural systems, both through their reliance on and through the impacts they have on nature, which can when unmanaged translate into financial losses, operational disruption, or negative impact on long term financial returns. We still observe few corporates adopt- ing nature and biodiversity targets across our investee universe during 2025 but awareness of the issues are growing. To strengthen the investee companies resilience and safe guard shareholder value we will continue to encourage companies to align with relevant disclosure frameworks and ambitions to reduce their impact and dependencies. For 2026, we will continue our participation in key nature- focused engagement workstreams, both individually and collaboratively, while also prioritizing spe- cific subthemes based on our impact and dependencies assessment of the investment portfolio. These includes, despite regulatory headwinds, the continued importance of robust deforestation and conversion policies, the phase out of hazardous chemicals and maintaining focus on emerging nature-related risks such as water consumption in the data center build out.
As a founding member of the Investors Policy Dialogue on Deforestation (IPDD), we are part of a global investor initia- tive established in 2020 to promote public policy dialogue aimed at halting deforestation in key regions. The initiative brings together 85 institutional investors across 21 countries, representing approximately USD 11.2 trillion in assets under management as of July 2025. We play an active role in the Management Committee and contribute to both the Brazil and Indonesia workstreams, engaging with public agencies and industry associations to advance responsible land use, forest management, and human rights. IPDD continues to drive collaborative engagement and knowl- edge sharing across stakeholders. In 2025, key activities includ- ed co-organizing a side event with PRI Spring at PRI in Person, with participation from members of the Brazil and Consumer Countries working group and the Central Bank of Brazil. In Indonesia, IPDD partnered with the Tropical Forest Alliance of the World Economic Forum, the Indonesia Banking Federation, and the Indonesia Chamber of Commerce to host a series of webinars ahead of the Indonesia International Sustainability Forum. Through these efforts, IPDD reinforces its commitment to addressing deforestation risks and supporting sustainable investment practices globally.
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