investment viewpoints
LOIM’s holistiQ joins Nature Action 100 stewardship initiative
holistiQ Investment Partners1 the sustainable asset management platform of Lombard Odier Investment Managers, is proud to be an initial signatory of Nature Action 100, a global investor engagement initiative aiming to drive greater corporate action on restoring nature and biodiversity.
Joining Nature 100, is a natural move for LOIM. Alongside climate, nature is a focus of our stewardship activity and central to our investment conviction in systems changes transforming the global economy.
Nature Action 100 has recently announced 190 institutional investor participants – representing USD 23.6 trillion in assets under management or advice – that will directly engage with 100 companies through the initiative. These companies are reported to be worth more than USD 9 trillion in market capital.
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Identifying systemically important companies
Nature Action 100 is a global initiative that focuses on driving greater corporate ambition and action to reverse nature and biodiversity loss. The purpose is to specifically engage with companies in key sectors that are systemically important in reversing nature and biodiversity loss by 2030.
Nature Action 100 has developed a set of investor expectations for companies on nature loss. These expectations outline six actions that investors will call on companies to take, relating to: ambition, assessment, targets, implementation, governance, and engagement.
Our stewardship team will actively participate on engaging companies within the initiative framework.
The foundation of our economy is in decline
Nature is in decline at unprecedented rates around the world. Already, 75% of land has been significantly altered to the extent that ecological processes no longer operate normally. The global rate of species extinction is up to hundreds of times higher than the average over the past 10 million years and is accelerating.
This not only has devastating environmental impacts but is also undermining the foundation of our economy. Over half the world’s GDP is moderately or highly dependent on nature. The global financial sector has a vital role to play in accelerating a shift toward more sustainable and regenerative business models. For companies, failure to address nature-related risks will likely have significant impacts on business operations and could ultimately lead to macroeconomic instability.
Through our stewardship work, we understand how institutional investors are increasingly recognising the materiality of these impacts. Amid growing recognition of the value of nature, companies that fail to act are being exposed to operational, regulatory and reputational risks. And those seeking to demonstrate how they are integrating the restoration of environmental integrity into their business models are becoming more attractive from an investment standpoint.
Our stewardship framework
Engagement is a core element of our stewardship work. It enables us to open and maintain constructive dialogue with a company in order to promote their alignment to the sustainability transition and shift business models to increase green alpha through the investment lifecycle.
For example, we engaged with French cosmetics company L’Occitane2 on reducing deforestation risks and developing better supply-chain management practices, carrying out biodiversity impact assessments and using more sustainable packaging.
Our commitment to stewardship is evidenced by our qualification as a signatory to the UK Stewardship Code for three consecutive years. The code sets high standards for reporting on the outcomes and integrity of the engagement, proxy voting and policy advocacy exercised by asset owners and investment managers.
Collaboration is essential
LOIM is part of a number of collaborative stewardship initiatives. These enable us to contribute to the power of joint investor action in addressing material issues. The campaigns we participate in are carefully selected to ensure alignment with our stewardship priorities. Since 2020, LOIM has been a member of Climate Action 100+, which focuses on pressuring the world's largest corporate greenhouse gas (GHG) emitters to take necessary action on limiting global warming.
We have a growing team of professionals dedicated to sustainable investing and nature. To this end, we appointed Dr Marc Palahi as Chief Nature Officer at holistiQ Investment Partners in May 2023, as part of our continued drive to deliver innovative solutions driven by the economic and environmental necessity of restoring nature.
Sources
[1] holistiQ is a trading name of the Lombard Odier Investment Managers group (“LOIM”) and is not a legal partnership or other separate legal entity. Any dealings in respect of holistiQ shall be carried out solely through LOIM regulated entities and their authorised officers.
[2] Any reference to a specific company or security does not constitute a recommendation to buy, sell, hold or directly invest in the company or securities. It should not be assumed that the recommendations made in the future will be profitable or will equal the performance of the securities discussed in this document
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