COP16 highlighted the urgent need for biodiversity investments and regulatory measures, but failed to secure consensus on funding, posing risks to the implementation of global biodiversity goals. What does it all mean for investors? 

Our analysis found that biodiversity footprints and underlying drivers varied significantly across regions and sectors. Such information could help institutional investors quantify the impacts of their investments, as they build and manage portfolios. 

Biodiversity is everywhere from food production to pharmaceutical drugs, so the biodiversity crisis puts both society and the global economy at risk. And while it is like the climate crisis in its cause, there are complexities and measurement difficulties that make the biodiversity crisis a distinct problem for investors to address compared to the climate crisis. On this episode we sat down with our colleague Arne Klug to understand where this complexity comes from and how can investors go about it when trying to include biodiversity in their investment practices.

Investors thinking about biodiversity are asking questions such as, how do I know which holdings are most vulnerable to biodiversity loss? And, can I measure biodiversity risk exposure across my portfolio? We aim to help them start finding answers. 

Although corporate disclosures around biodiversity- and nature-related risk vary, with growing stakeholder awareness and initiatives such as the TNFD framework, we may see a move toward more standardized disclosures that could help investors better assess these risks.

The news on our progress toward climate change and biodiversity goals was not great as Earth Day 2023 approached. But there were some bright spots, including detailed proposals to move forward, increased attention from governments in the form of regulation and a growing awareness from investors that accounting for these issues may be the right thing to do for their portfolios. 

Some property and casualty insurers already use geospatial analysis in their pricing, claims processing and risk management. Adding a layer of biodiversity data to this analysis may help incorporate biodiversity considerations in underwriting.

Investors face growing pressure to reverse biodiversity loss. We take a look at the issues shaping nature-related financial risk, key takeaways from the COP15 pact for investors and developments in biodiversity-based disclosure.

Continued forest loss poses risks to companies and investors. We use MSCI’s Biodiversity Screening Metrics to help identify industries exposed to deforestation risks and flag companies for a review of risk-management practices and active engagement.

A quarter of animal and plant species could face extinction heightening economic risks from biodiversity loss. Investors and issuers focusing on asset location and dedicated risk management practices could mitigate some of these challenges.

Regulations to increase transparency and new methods for quantifying climate change risks and opportunities have pushed the issue to the fore for many investors. We get on the road to COP 26 with Professor Robert Eccles of The University of Oxford, Linda-Eling Lee, Head of ESG Research, and other MSCI experts.

Climate. ESG bubbles. Disclosure. Social inequality. Biodiversity. The topics don’t get much bigger — or more systemic. Here’s our analysis of the five ESG trends that will matter most to companies and their investors in 2021.

Regulators are considering banning diesel cars in various countries and cities to lower levels of toxic nitrogen oxides. This trend has already impacted auto markets in Europe. Declining diesel vehicle sales reflect a shrinking trust in customers who fear increased restrictions on use and lower re-sale values.  This analysis assumed a moderate 30% decline in diesel vehicles in a company’s fleet  by 2021 and modelled two different scenarios. Under scenario 1, customers buy petrol...