This is an edited transcript of the Talking Heads podcast episode Discussing biodiversity loss, COP16, and our updated roadmap.

Andrew Craig: Hello and welcome to the BNP Paribas Asset Management Talking Heads podcast. Every week, Talking Heads will bring you in-depth insights and analysis through the lens of sustainability on the topics that really matter to investors. This week on the Talking Heads podcast, we’re going to be talking about biodiversity with Robert Alexandre Poujade, who is Biodiversity Lead within the Sustainability Centre. Welcome, Robert Alexandre, and thanks for joining me.

Robert Alexandre: Hi Andy, great to be here.

AC: Now we’re talking in the wake of the 16th meeting of the Conference of the Parties to the Convention on Biological Diversity, also known as COP16, that was held in Cali, Colombia, in the second half of October. Can you talk us through what you see as the key takeaways from COP16 for investors?

RP: Maybe I can take a step back to the previous COP, because since the adoption of the global biodiversity framework at COP15 in Montreal in 2022, we’ve seen an increase in awareness of the potential economic implication of biodiversity loss. That’s among governments, businesses, NGOs.

To give you a flavour of what biodiversity loss means for businesses, for investors, the World Bank recently said in a study that in a worst-case scenario, if you have a partial ecosystem collapse, Malaysia could experience a 6% GDP annual loss by 2030. Just to give you the magnitude of impacts we’re discussing here.

This year at COP 16, there was lots of engagement that emphasised the importance of reducing the drivers of biodiversity loss – land use change, overfishing – but also of increasing the financial resources for conservation, restoration, [the] sustainable use of biodiversity. Two important outcomes truly link well to our view that carbon, biodiversity and social dimensions should always be taken together. That’s the better recognition of the role of indigenous people and local communities as nature stewards. That’s more alignment between biodiversity and social dimensions.

AC: Can you talk a little bit about how we at BNP Paribas Asset Management are taking biodiversity loss into account in our portfolio management? Where do we stand on addressing biodiversity loss?

RP: We’ve been working on that for several years. In 2021, we launched the biodiversity roadmap, and we had two main objectives. We acknowledge that many of the scientific studies demonstrate that biodiversity loss is a source of physical risk, systemic risk for the global economies. There is this question of returns for our portfolios that we manage for clients. That was the first objective.

The second one is being grounded in scientific evidence that shows how urgent the biodiversity loss crisis is. What we said is ‘let’s use the global sustainability strategy to embed biodiversity in all six pillars of our investment policy’. That was to create engagement and awareness that we need to act now on biodiversity where we can. So, we adopted a target on water, to improve the water efficiency of our investment portfolios, [and] a target to protect forests.

The other aim was to improve our disclosure. In 2021, disclosure was not great from corporates. We needed to show the way and try to be vocal with our clients and the stakeholders. We collaborated with NGOs and thinktanks to publish case studies. And of course, to educate our workforce, not just the investment team.

AC: You’ve been working on updating the roadmap. Can you talk about how the updated roadmap helps to address biodiversity loss?

RP: Yes, three years after the launch, it was time to report back to our clients, to our stakeholders on our progress. And of course, to consider the next steps – how we move forward on our key priority areas. To name a few, we have a policy that basically [checks] if we’re involved in companies that are involved in the trading of protected species, in industrial fishing in the high seas, or in severe environmental pollution. These are not the companies we’re looking for.

We have screening requirements. For example, we will not invest in companies with oil & gas reserves in the Amazon or ones that are active in developing infrastructure in these areas.

There’s also the question of our partners. Who are our trusted partners who we work and collaborate with? For example, we’ve worked with Planet Tracker to launch an internal ocean sector framework for our investment team. We also partner with Naturalis, the Dutch biodiversity centre, to explore biodiversity measurement – via remote sensing, drones, camera traps or other available technology.

We have been very vocal in the update of the roadmap to say what type of data we use, [from] which data provider. [For example,] we use Iceberg Data Lab, which is a French fintech company. The update is really to say how do we live up to our commitments, providing concrete examples, all the metrics.

AC: Let’s just talk about what comes next. What do you see as being the next stage in this fight to tackle biodiversity loss and how do you anticipate what BNP Paribas Asset Management’s contribution will be?

RP: The main priority is equipping investment teams with the best biodiversity decision-making. We need to provide them the data that matters most to them given their sector, asset class or geographical focus. Other priorities are doing deep dives, providing research papers. We’ve also asked data providers to provide better data points to the investment community.

Plastic and chemicals are also important sectors that span across our three main areas of work, [the] carbon, biodiversity and social dimensions. And, finally, education: continuing to educate our clients, our workforce about biodiversity loss, engaging [with] corporates so that they improve what they do and meet our investor expectations as part of Nature Action 100.

So that’s really the core focus.

AC: Well, thank you. That’s a very comprehensive review of what we’re doing, and we look forward to hearing about how it progresses in the future. Robert Alexandre, thank you very much for joining me today.

RP: Thank you, Andy. A pleasure.