AIGCC publishes report on nature loss

May 24th, 2024

The Asia Investor Group on Climate Change (AIGCC) has released a report to demonstrate how to effectively manage nature-related risks.

The report, Nature at a Tipping Point, provided guidance to investors in the Asia Pacific region on identifying and addressing nature-related risks.

It provided a checklist for investors on managing nature-related risks, which recommended that investors first understand expectations and identify relevant information, gain commitment from top management and the board and clarify priorities and develop a policy on nature.

Institutional investors should also use the TNFD framework and adopt food disclosure practices, actively engage with the companies they invest in and identify existing initiatives they could join, according to the report.

It highlighted that the Asia Pacific region is experiencing significant nature loss, with the Asia Pacific ecosystem health declining by 55% since 1970.

This is partly due to a lack of appropriate financial backing for reversing this loss, despite 53% of Asia Pacific economic gross value added being moderately or highly dependent on nature, and 58% of Asia Pacific stock exchanges’ market capitalisation comprising companies in sectors that are moderately or highly dependent on nature.

As a result, the report said institutional investors can play a vital role in preventing nature degradation, and in scaling up the amount of finance that is directed to nature-positive approaches.

The report, which was produced in collaboration with PwC, noted that nature protection and restoration can present significant and profitable opportunities for companies and investors.

It also included six case studies to illustrate how Asia Pacific investors and companies are assessing, disclosing, and managing nature-related dependencies, impacts, risks and opportunities.

The report said: “As an initial step, it is vital that investors assess the priorities the nature-related issues in their portfolios and asset allocation based on materiality. They should then direct their efforts towards actions that can have the most impact.”

Last Updated: 24 May 2024