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The views expressed are those of the authors at the time of writing. Other teams may hold different views and make different investment decisions. The value of your investment may become worth more or less than at the time of original investment. While any third-party data used is considered reliable, its accuracy is not guaranteed. For professional, institutional, or accredited investors only.
Mounting evidence of the financially material impact of biodiversity is raising concern among many stakeholders, including investors and consumers, and prompting changes in the regulatory and legal environment. Understanding the impact of biodiversity loss on asset prices, corporate value, and, by extension, investment outcomes is nascent, and lack of reliable data remains a hurdle to measurable action. Nonetheless, Wellington’s ESG Research Team believes market participants need to consider and account for the costs of biodiversity loss and the benefits associated with ecosystem preservation.
Our team aims to integrate biodiversity into our research and stewardship approach, just as we do with climate change. And, as with climate change, we prefer engagement as the primary means of helping companies and issuers understand the related risks and opportunities. We consider how companies address material biodiversity risks in our proxy votes as well, and we will continue to evolve our approach to this complex subject. Here we share recent examples of our efforts to assess companies’ risk exposure to biodiversity and better understand their plans mitigate it.
Underpinning the ESG Research Team’s approach to biodiversity stewardship is our ongoing collaboration with Woodwell Climate Research Center. The scientific data and insights we gain through our work with Woodwell is the starting point for understanding the relevance of biodiversity for the client portfolios we manage. As for engagements, our team believes in prioritizing conversations with companies that, in our view, have material exposure to biodiversity-related financial risks, such as those with heavy operational or supply-chain reliance on ecosystem services. We primarily use engagement to influence change and preserve long-term value, as we believe this is the most constructive way to enhance value and reduce risk in client portfolios. We believe active managers can enhance engagements by leveraging insights from fundamental industry research teams, climate science partners, and ESG experts. When engaging on land and water use (two key drivers of biodiversity loss) investors can also access several frameworks such as Global Canopy’s Deforestation-Free Finance Sector Roadmap and Ceres’ Investor Water Toolkit.
Awareness, governance, and strategy
Policies, planning, and operations
Regulators and governing bodies, including the European Commission, have begun to enact polices aimed at conservation and preventing ecosystem degradation. There are currently several bills moving through the US Congress that address biodiversity loss. At the same time, concerns from consumers and investors about the potential negative social and economic outcomes of biodiversity loss are mounting. Wellington’s ESG Research Team believes that companies and issuers, and the entities that invest in them, can no longer ignore the financial implications of biodiversity loss. We will continue to rely on engagement as our primary method of stewardship on biodiversity awareness and risk mitigation.
Shareholder activism in Japan: Integrating ESG within the investment processContinue reading
Building resilience: Key questions equity investors need to ask todayContinue reading
Shareholder activism in Japan: How our engagement approach drives valueContinue reading
Activism – History and evolution in JapanContinue reading
2022 Sustainability ReportContinue reading
The value in valuing employeesContinue reading
Shareholder activism in Japan: Integrating ESG within the investment process
In the final article within our series on shareholder activism in Japan, ESG Analyst Soo Ho Jung shares how the Japan equity team integrates ESG to help realize value for investors.
Building resilience: Key questions equity investors need to ask today
Consider these essential traits for re-assessing the resilience of your core equity portfolio against higher interest rates and more adverse macro conditions.
Shareholder activism in Japan: How our engagement approach drives value
Equity Portfolio Manager Katsuhiro Iwai introduces the Japan equity investment team's approach to engagement, sharing a number of successful recent case studies.
Activism – History and evolution in Japan
Investment Specialist Toshiki Izumi examines the history of shareholder activism in Japan, with particular emphasis on the differences between current and historical attitudes toward activism.
2022 Sustainability Report
We appreciate the opportunity to share our approach to advancing sustainable practices across our investment, client, and infrastructure platforms.
The value in valuing employees
Companies able to adapt and respond to challenges in the labor market will find themselves well positioned for the future, say Equity Portfolio Managers Yolanda Courtines and Mark Mandel.
Assessing the impact of climate resilience
Oyin Oduya and Louisa Boltz discuss the case for impact solutions focused on climate adaptation and share high-level guidelines to help overcome the associated measurement challenge.
ESG integration in public and private markets
Two ESG leaders discuss why ESG matters for investors, and how their teams help inform the investment process. They also share their priority research and engagement topics for 2023.
Key updates to Wellington’s 2023 proxy voting guidelines
We periodically update our guidelines in an ongoing effort to help Wellington's investment teams vote proxies in our clients' best interests. Read about key updates for this year from two members of Wellington's ESG team.
Focusing on value amid rising global challenges and opportunities
Our Sustainable Investing (SI) Research Team offers a high-level view of 2023 research and engagement priorities.