Tara Irwin, senior ESG analyst, Hargreaves Lansdown: “The race to protect nature is on - but most investors are still at the starting line. While managers are beginning to engage with companies on nature-related risks, only a small fraction have set measurable targets. The HL research findings come as policymakers and investors gear up for COP30 in Brazil, where financing nature and halting biodiversity loss are expected to take centre stage.
While engagement is gathering pace, tangible target-setting remains limited. The research reveals a clear divide between large global managers with dedicated sustainability teams and smaller firms that lack the resources to conduct detailed, bottom-up assessments of nature dependencies and impacts.
Only a handful of firms - including AXA, LGIM and Schroders - are leading the way combining engagement, disclosures, and targets. Achieving all three demands deep expertise, consistent data and firm-wide commitment - resources smaller managers often lack. For most, progress depends on the availability of robust, comparable data and a clear materiality framework to identify which nature-related issues are most relevant. For example, water dependencies may be critical for semiconductor producers, while soil degradation is more material for agricultural businesses. Engagement is a key tool managers can leverage to improve disclosures and impact assessments.
These findings highlight a growing recognition that nature loss is not just an environmental concern but a material financial risk with direct implications for long-term economic value. According to the Green Finance Institute, here in the UK, damage to the natural environment is slowing economic growth and could reduce GDP by up to 12% in the next decade.
While engagement marks progress for the industry, setting clear, time-bound nature targets is what enables investors to quantify and manage these dependencies. Doing so helps direct capital towards companies that protect or restore natural assets, while signalling to markets where future investment priorities lie. Targets also drive transparency and accountability, encouraging better data and disclosure.
With COP30 set to focus on implementation of the Global Biodiversity Framework, investors are under growing pressure to integrate nature into their financial decision-making. Frameworks such as the Taskforce on Nature-related Financial Disclosures (TNFD) aim to provide a roadmap, but adoption remains patchy across the industry. The TNFD is a science-based and government-supported global initiative, building on the success of the Taskforce on Climate-related Financial Disclosures, which is now mandatory in the UK for large entities. Early signals suggest the TNFD could follow a similar path in UK regulation, bringing nature-related reporting into the mainstream.
Hargreaves Lansdown’s analysis underscores that investor action on nature is still at an early stage – with 25% producing nature-related disclosures, such as the TNFD reports - but momentum is slowly building.”
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