Facilitator: Sianne Haldane Expert: Sam Tripuraneni
Headlines:
- Natural Capital Transition is a strategic theme in ESG allowing for critical shifts in financing food, ocean, infrastructure and circularity.
- There are opportunities to finance both transition companies as well as those solution-based companies
- Still a bit stuck on broader labels - ESG v Sustainable investment and how this theme fits in
- Challenge around the metrics to be measured
Context:
A challenge that was identified in particular in this theme - if looking for solutions-based companies’ lack of deal flow, as well as these being more impact-oriented, potentially more risk as the market matures and there are more shifts in consumer behaviours.
With most funds - incl a Natural Capital/ Biodiversity focussed fund - helpful to look at what the intention of the fund is. Is there intention of a positive real-world outcome or impact, so you can understand what your investment is achieving? The word “impact” also gets thrown around and important to show what this impact is - we should set a high bar and not be naive - we can’t always have positive impact achieved. Can drive transition through sustainable and impact investments.
Differ in materiality from sector to sector for nature- no standard adoption yet, broad themes are emerging - such as sustainable water use, sustainable land use packaging/ circularity and deforestation. A question arose on whether it might not be more valuable having these as engagement topics rather than a specific fund to start driving the transition more.
Key takeaways:
What are consumer attitudes/ expectations
The topic of labelling and clearer language emerged here too as well as the gap between (wealth managers) advisors and investors - in articulating nuances of these investments. A question was also asked - do the end investors’ expectations match too? Is this what they are looking for? (E.g., plastic reduction etc). NB to build up the Trust factor in finance to show credibility - Also as stewards of capital - natural capital theme- significant risk and need to be able to educate more on this theme as we are behind on climate change and this transition needs to happen.
Whole industry needs to mobilise - Regulatory frameworks need to develop and be adopted quicker - engagement and stewardship is a potent tool here and these themes should be part of broader topics across the board
