Managing nature risks and investing in the opportunities top tips for pension fund charis and trustees

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Managing nature risks and investing in the opportunities top tips for pension fund charis and trustees

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Accounting for Sustainability provides advice for pension fund presidents and managers on how to consider nature in their decision-making.

In his foreword, TNFD Co-Chair David Craig stresses the need to take immediate action to address the risks to nature and biodiversity that are already present in portfolios today.

"Various biodiversity studies and impact assessments have shown that between 35% and 54% of assets held by financial institutions are highly or highly dependent on ecosystem services."

This document, together with TNFD's recommendations for financial institutions, provides practical ways on how financial institutions can address this aspect.

The top 7 tips for pension fund presidents and trustees collected in the publication are:
  • Nature-related risks are financial and fiduciary risks that pension funds and other asset owners must consider and manage in their investment decision-making processes.
  • Incorporating nature-related considerations into investment strategies is compatible with fulfilling the fiduciary duty to act in the best interests of members.
  • Pension fund presidents and administrators can take practical steps to align their pension funds with a nature-positive approach, such as identifying nature-related risks and opportunities, collaborating with companies and stakeholders, and collaborating with other investors and policymakers.
  • The Task Force on Nature-related Financial Disclosures (TNFD) provides a framework for identifying, assessing, managing and disclosing nature-related risks and opportunities, and pension funds can use it to guide their reporting and disclosure practices.
  • Pension funds can also use other frameworks and tools, such as the Task Force on Climate-related Financial Disclosures (TCFD), to guide their reporting and disclosure practices and communicate their climate-related risks and opportunities to stakeholders.
  • Pension funds can play a key role in driving systemic change towards a nature-positive economy by investing in nature-positive solutions, collaborating with businesses and policymakers, and collaborating with other investors and civil society organisations.
  • Pension funds need to be transparent about their nature-related risks and opportunities and communicate them to their participants and other stakeholders.

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