Some large investors in the US and Europe have supportive voting policy stances for nature and biodiversity, although not all of them, a report by research company Morningstar has found.

Apart from climate, nature and biodiversity were the most-often referenced topics in voting policies by the investors assessed by Morningstar, it said.

“Generally, these policies request disclosure of risks and opportunities associated with companies’ exposure to nature,” it said.

Some of the largest investors in the world were among those in support of nature in their policies, including US organisations JPMorgan, BlackRock, and State Street, as well as European firms Amundi, BNP Paribas, and Legal and General Investment Management (LGIM).

Morningstar assessed a limited pool of 10 of the largest US investors, alongside five European firms, and five other sustainability-focused financial institutions, looking at their policies as of Feb. 22.

“Some managers also support requests for disclosure of more specific nature-related issues like water usage and deforestation risk,” said Morningstar.

“This group includes sustainability-focused managers, but also large US managers like BlackRock, Invesco, and State Street, as well as sustainability-focused policies from Fidelity and JPMorgan.”

However, not all investors tackled nature in their policies. Franklin Templeton, Dimensional, and Vanguard had “not addressed” the topic, while Capital Group was “neutral”, according to Morningstar.

Voting policies are company-wide guidelines for how investors vote on issues pitched by shareholders from their investee portfolio. The number of nature-related proposals put forward by shareholders over the last few years is small but increasing.

More resolutions addressing nature in 2024 are “likely” after the TNFD called for companies to adopt its recommendations following the release of its final framework in September, Morningstar said.

New-York based BlackRock, the world’s largest asset manager, said in its 2024 proxy voting guidelines for US securities that: “Given the growing awareness of the materiality of these issues for certain businesses, enhanced reporting on a company’s natural capital dependencies and impacts would aid investors’ understanding.”

“In our view, the final recommendations of the TNFD may prove useful to some companies,” it said.

London-based asset manager LGIM said in its most recent biodiversity policy from 2021 that: “We will be seeking greater disclosure from investee companies in line with the TNFD framework and Sustainability Accounting Standards Board requirements,” LGIM said.

Nature was more popular than Scope 3 emissions, political influence, and societal issues, among the policies of European managers, Morningstar said.

By Thomas Cox – t.cox@carbon-pulse.com

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