Our Responsible Investment overlays
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Biodiversity loss is a systemic risk and one of the biggest global challenges of our time. Nature is being eroded at rates unprec- edented in human history and we are facing the irreversible loss of plant and animal species, habitats and vital crops. Research by the World Economic Forum (WEF) finds that USD 44 trillion of economic value generation – more than half of the world’s total GDP – is moderately or highly dependent on nature and its services 17 . At the same time, WEF estimates that nature-positive transitions could generate up to USD 10.1 trillion in annual business value and create 395 million jobs by 2030 18 . As the single largest asset manager in the Nordics, we acknowledge our role in preventing biodiversity loss and channelling capital flows towards nature-positive solutions. We have been actively working with our portfolio companies to address sustainability risks and ceasing opportunities ever since the signing of the UN Principles for Responsible Invest- ment in 2007. As part of our sustainability focus we are closely working with our portfolio companies to address biodiversity risks and to capitalize on opportunities.
Did you know?
WEF Global Risks Report 2021, identified biodiversity loss as 5 th biggest global risk by likelihood, and 4 th biggest global risk by impact. 19 The latest WEF Global Risks Report, published in 2022, identifies biodiversity loss as the 3 rd most severe risk on a global scale over the next 10 years. 20
Biodiversity engagements
In 2021, NAM had 123 engagements on topics related to Biodiversity, representing 12% of our total engagements.
17) https://www.weforum.org/reports/new-nature-economy-report-ii-the-future-of- nature-and-business. 18) https://ec.europa.eu/environment/nature/biodiversity/economics/index_en.htm.
19) WEF Global Risks Report 2021. 20) WEF Global Risks Report 2022.
Collaborative engagement initiative: IPDD
Nordea is a founding and advisory member of the Investors Policy Dialogue on Deforestation (IPDD), a collaborative engage- ment aimed at initiating and coordinating a public policy dialogue on halting deforestation in selected countries, established in 2020. The IPDD engages with public agencies and industry associations on this issue – initially in Brazil. IPDD investors want to continue to invest in Brazil and contribute to its economic development and protection of the environment and are urging the government to demonstrate clear commitment to eliminating deforestation and protecting the rights of indigenous peoples. The engagement group has set out a series of demands for the Brazilian government to sufficiently address deforestation-related issues. The IPDD engagement group is expecting the following five outcomes from the Brazilian government:
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Significant reduction in deforestation rates Enforcement of Brazil’s Forest Code
• Reinforcement of Brazil’s agencies tasked with implementing environmental and human rights legislation, and avoid- ance of any legislative developments that may negatively impact forest protection • Prevention of fires in or near forest areas, in order to avoid a repetition of fires like in 2019 • Public access to data on deforestation, forest cover, tenure and traceability of commodity supply chains During 2021 the IPDD Brazil workstream has met with federal representatives, state representatives, congressmembers, and civil society in Brazil. They have also held educational and knowledge sharing sessions, both in and outside of Brazil, and conducted outreach with investor coalitions, foreign representatives, and other relevant stakeholders. The IPDD’s engagement work has also been extended to Indonesia. NAM is also an active participant in the Indonesia working group, which aims to work constructively with, among others, relevant government authorities and financial market regulators to promote good social and environmental governance and to reduce financial risks arising from deforestation and land degradation.
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