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Biodiversity in pensions: 3 takeaways from our sold-out event

Just get started, integrate nature reporting into your TCFD and tell members what you’re up to.

“Nature doesn’t need people. People need nature”.

That’s the arresting note on which IFM Investors’ Maria Nazarova-Doyle ended her talk at our recent Biodiversity in Pensions event, which brought industry experts together to share how different parts of the pensions world are rising to the challenge. Maria reminds us that nature operates independently of us – but that we cannot operate without nature.

Here are some of the punchiest insights from the day.

1. Just get started – do not let perfect be the enemy of good

There will always be things standing in the way of integrating the risk of biodiversity loss into your scheme. It might be a trustee who’s not engaged on climate change or biodiversity. It might be data sets that don’t match up. Or it might be the ongoing struggles with biodiversity scenarios.

Analysing scenarios help us plan for projected future conditions, typically based on models and simulations. With climate change, those scenarios are robust, based on decades of research.

But it’s much harder with biodiversity, in part because of a lack of relevant data and over-reliance on a single model for biodiversity projections. So there’s ongoing debate about whether the existing biodiversity scenarios are good enough.

M&G’s Mark Thompson emphasised that you shouldn’t wait until you get it right, or you’ll never start. Learn through doing. And that’s a sentiment we heard throughout the day. Mark, in particular, talked about what trustees could do to engage on biodiversity issues. He encourages trustees to get training if they need it, understand what their exposure is, and to take the reins on stewardship.

2. Start integrating nature reporting into your TCFD

Most businesses are working towards net zero. And if you’re working on net zero, then you’re already working on biodiversity loss too. That’s because the two are inextricably linked.

Redington’s Anastasia Guha said there’s no way to reach net zero without helping to fix the ecosystems on which the International Panel on Climate Change (IPCC) targets depend. Ecosystems play a crucial role in carbon sequestration. Biodiversity enhances the resilience of ecosystems to climate change. And nature provides the renewable resources that are key to transitioning to a low-carbon economy. So the sooner we recognise climate change and biodiversity are interdependent, the better.

Anastasia encourages trustees to start collating metrics around nature and biodiversity, creating a stewardship plan for your scheme, and committing to it by sharing it in your TCFD report. Essentially, start integrating TNFD reporting into TCFD. As Anastasia said, ‘open your net zero box and put nature in it’.

3. Start telling members about it

Most members know what climate change is, but they don’t know what their pension has to do with it. Explaining this is a lightbulb moment for them. They want to know what their scheme is doing about climate change, and sharing examples of how the scheme’s investing for good really brought this to life.

Members also want to hear how you’re addressing biodiversity loss, even if they don’t fully understand it. There’s no downside to switching your members on to what their pension can do for the climate and nature. It’s helpful to get members to start thinking about this – and it keeps it on your agenda too.

We’ve created a TCFD member summary template to help you tell your members how you’re working to meet net zero.