Nature and Biodiversity: Interview with Eline Reintjes

Eline is a Climate and Nature Investment Strategy Manager and leads the nature and biodiversity-related workstreams for the ASA project within the UK Life Investments Sustainable Investments team. She will tell us about the relationship between nature, biodiversity and climate change and the new Task Force for Nature-related Financial Disclosure (TNFD) framework.

Question 1: What is the interplay between nature and biodiversity and what role do they play in tackling climate change?

Nature and biodiversity are often used interchangeably. Nature is the physical world we know: land, water, the ocean, atmosphere as well as species and genes. Biodiversity can be seen as a subset of nature as it refers to the part of nature that is alive, for example, the diversity in ecosystems, species and genes.

Nature, biodiversity and climate change are strongly interconnected. Climate change is a driver of nature and biodiversity loss. The rise in temperatures and shifting weather patterns harm nature and biodiversity in many different ways such as, land degradation, destruction of habitats, coral bleaching and more. Simultaneously, the preservation of nature and intact ecosystems plays a crucial role in tackling climate change. Nature protection and restoration contribute to climate change adaption through ecosystem services, including coastal protection and erosion control, and climate regulation. Therefore, nature plays a pivotal role in tackling climate change. It is also essential to recognise the intrinsic value of preserving and restoring nature, as society, the global economy, and life itself are dependent on nature and the services it provides.

Question 2: What is Aviva doing to manage nature-related risks and opportunities and to incorporate nature and biodiversity considerations into our investment practices?

Aviva has taken several proactive steps to address nature and biodiversity issues. Annually, we produce sustainability reports. Our inaugural Biodiversity report was published a year ago, ahead of the 15th Biodiversity Conference of the Parties (COP 15), and it included an assessment of Aviva’s potential exposure to deforestation risks through investments and underwriting. This year, Aviva Investors has been conducting a biodiversity assessment.

At Aviva, we are starting to look at nature-related impacts and dependencies in our portfolio, considering the resulting risks and opportunities to inform our investment practices. We are also enhancing our analysis of climate physical risks and planning to extend this to nature physical risks. We have also started to conduct an industry-wide risk assessment of our investments, underwriting and operations to inform our engagement strategy for future climate and nature-related activities.

Question 3: What is the purpose of the Task Force on Nature-related Financial Disclosures (TNFD) and what are the potential implications for businesses and investors?

The TNFD provides a set of recommendations and disclosure framework for companies and financial institutions to assess, and in time, disclose their nature-related impacts, dependencies, risks and opportunities. The objective is to enhance risk management and transparency, ultimately redirecting financial flows from nature-negative outcomes towards nature-positive outcomes.

Companies and financial institutions intending to conduct nature assessments based on TNFD guidelines can find a range of information and tools on the TNFD website. The TNFD has also released sector-specific guidance on how to collect relevant data and suggests core metrics for disclosure. This information aids in identifying nature-related impacts, dependencies, opportunities and risks that companies may not be aware of.

The adoption of TNFD guidelines could have significant implications for stakeholders and customers. As more companies disclose their nature-related information, a wealth of new data will become available to stakeholders, including financial institutions like Aviva, enhancing decision-making, and improving our understanding of the industry’s impact on nature, the risks and opportunities in our investment portfolios and insurance businesses.