The finance sector adopts a nature transition model
Paris and Oslo are pushing biodiversity deeper into investment mainstream as BNP Paribas Asset Management collaborates with Storebrand Asset Management to lead a new working group for the Finance for Biodiversity Foundation.
The group will develop a nature transition model when it comes to financial institutions. It will be co-chaired by the head of climate and environment at Storebrand Asset Management, Emine Isciel, and Robert-Alexandre Poujade, biodiversity lead, BNP Paribas Asset Management. Julen Gonzalez, technical director of the Finance for Biodiversity Foundation, is going to coordinate the work.
The move comes as investors are increasingly being urged to consider the loss of nature as a financial risk, not just an environmental one. Biodiversity loss impacts food systems, land values, access to water, infrastructure, and insurance as well as supply chains. This creates both a portfolio exposure and a governance risk for asset managers as well as banks.
Biodiversity is a key pillar of the sustainability strategy of BNP Paribas Asset Management. In 2021, the firm launched its Biodiversity Roadmap. Its latest role builds on that work as part of a wider finance-sector effort aimed at practical tools for investment teams, asset owners, banks, and other financial institutions.
New Framework to Support Nature-Positive Finance
The Finance for Biodiversity Foundation working group will discuss how financial institutions can grow credible nature transition finance worldwide.
It will focus its work in three main areas. The first is to define the role of financial institutions in enabling nature-positive economic activity. The second is to convert that role into a practical framework for financial decision-making. Third, make sure the framework is consistent with the global nature-positive target.
The framework is designed to help investors recognize companies that are making credible progress towards better alignment with nature goals. It will draw on existing climate and nature guidance and emerging practice from the Finance for Biodiversity Foundation and the wider finance community.
The nature transition finance is still less developed than the climate transition finance for executives and investors. Many institutions have more explicit models for evaluating net-zero commitments than for assessing nature-based corporate action. The new framework is intended to fill that gap.
The work could raise expectations for companies around governance, disclosure, capital allocation, and operational change. For investors, it could allow for more consistent engagement with issuers across sectors exposed to nature risks.
BNP Paribas AM Sees Use Case Throughout Investment Platforms
It said the new framework could help investment teams at BNP Paribas Asset Management establish dedicated, standardized approaches across various investment platforms and fund offerings.
The firm said more clarity on the corporate nature of transition would help asset owners as well as clients. This could become more crucial as institutional investors respond to biodiversity loss, regulation, and demand for credible sustainability products.
The Biodiversity Lead, BNP Paribas Asset Management, said, “I am honoured to co-chair this new working group, which aims to harness the energy and ideas of the FfB community and partners. We heard the call that we need the equivalent of net zero for nature. That insight sparked the genesis of this initiative. Working towards a nature-positive financial system is an ambitious goal but could be difficult to achieve if nature remains absent from transition discussions and corporates lack financial incentives to transition. I look forward to implementing this nature transition model alongside our investment teams.”
His comments highlight a fundamental market issue. Without clear financial incentives, companies may find it difficult to act on nature. It may also be difficult for investors to judge progress without a common definition of credible shift.
A decision-useful framework might provide a clearer structure on both sides. It could also help finance teams tell the difference between high-level nature commitments and transition plans that are backed by measurable action.
Biodiversity – A Portfolio and Boardroom Issue
According to Global Head of Sustainability at BNP Paribas Asset Management, Jane Ambachtsheer, “There is growing awareness of the critical impact of biodiversity loss on the economy. By co-chairing this new working group, BNPP AM reinforces its commitment to be a leading player in the transition to a more sustainable economy. We look forward to continuing to evolve our partnership with the FfB Foundation, and to providing our clients with the tools and resources they need to take action.”
The message is loud and clear for the C-suite. Nature is stepping into the same strategic ring as climate and supply chain resilience as well as long-term capital planning.
The move also reflects a broader trend in sustainable finance. Investors are starting to ask companies if they can demonstrate solid transition strategies for all environmental systems, not just carbon. This involves land use, water, pollution, and impacts on ecosystems, as well as dependencies on biodiversity.
The framework could support the promotion of uniformity in market practice for policymakers as well as regulators. For asset owners, it could assist in stewardship priorities, manager selection, and product due diligence.
The global finance industry has been developing frameworks for climate risk as well as net-zero alignment for years. Nature now calls for an equivalent discipline. The participation by BNP Paribas Asset Management in the new working group is an example of how biodiversity is transitioning from specialist sustainability teams to the heart of investment decision-making.