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The terms “nature” and “biodiversity” are often used interchangeably but have distinct definitions. Nature encompasses the entire physical world, landscapes, and ecosystems. It represents the broader environment in which life exists.
On the other hand, biodiversity refers specifically to the variety of life within these ecosystems, including the diversity of genes and species. This distinction is important, as it enables the specific challenges related to the conservation of living organisms and their habitats to be addressed while also considering the broader natural context.
Biodiversity loss is regarded as one of the most critical global environmental threats alongside climate change. It does not only threaten the natural world, but also presents significant economic risks that directly impact global markets and investment portfolios. As emphasized by the Dasgupta Review and the World Economic Forum, the erosion of natural capital – the resources such as forests, soils, water and air – poses a substantial threat to the stability and sustainability of our economies. Industries with direct dependencies on nature, including agriculture, forestry, and fisheries, are at heightened risk of disruption, potentially affecting over half of global GDP.
The loss of natural capital and biodiversity can lead to supply chain interruptions, increased operational costs, and market volatility, challenging long-term financial performance. To mitigate these risks, it is important for businesses and financial institutions to incorporate nature and biodiversity considerations into their strategic planning, investment decisions, and risk management frameworks. Recognizing the intrinsic value of nature and prioritizing sustainable practices will not only safeguard natural resources but also enhance economic resilience and support sustainable development.
Source:
The Economics of Biodiversity: The Dasgupta Review (pdf)
World Economic Forum article: 50% of the global economy is under threat from biodiversity loss
In the recent years, considerations around nature and biodiversity have been incorporated into various financial instruments and investment strategies. SEB supports its corporate and institutional clients in integrating nature and biodiversity considerations into financing structures. One example is Stora Enso’s sustainability-linked financing framework, published in 2023, where biodiversity was included in the form of a KPI, and where SEB was sole structuring advisor. SEB also support institutional clients by providing insights on the development of the market in relation to nature and biodiversity. Moreover, SEB can help investors assess their portfolios for biodiversity-related risks and advise corporate clients on how to best integrate targets on biodiversity into loan and bond structures.
Related articles:
Stora Enso Sustainability-Linked Bond
SEB provided analysis when pension company developed biodiversity roadmap
SEB is connected directly and indirectly to nature, both through its own operations and through business relations. SEB therefore integrate environmental considerations throughout SEB’s activities. To do so, SEB has developed a special policy, called the Environmental Policy on Climate, Nature and Water, which guides the bank’s work in these areas.
The policy highlights the importance of the interlinkage between climate, nature and water, and that the thematic areas should not only be seen as separate aspects, but as parts of a bigger biosphere system with dependencies and impacts.
SEB supports companies in managing natural resources responsibly, using the following guiding principles:
SEB approaches the work with nature and biodiversity in different ways depending on the sector. For example, sector policies are applied where nature related issues are found to be a sector risk. Sector policies may include requirements of for example no deforestation, no material adverse impact on sensitive environmental areas, no trade in endangered species or application of the mitigation hierarchy.
SEB continuously works to develop the policies and other approaches to support companies in their work to reduce adverse impact on nature and biodiversity.
Our sustainability policies
One important part when working with nature and biodiversity is collaboration, these are some initiatives SEB is engaged in:
SEB Asset Management, the fund company of SEB, has recently updated its sustainability policy, including the addition of new exclusion criteria for biodiversity. For example, it will not invest in companies that have a negative impact on endangered species or particularly sensitive areas. Moreover, in 2023 SEB Asset Management (then called Investment Management) has signed the Finance for Biodiversity Pledge, promising to engage with investee companies on behalf of investors and intensify its work with measuring impact on nature from the portfolio.
Article: SEB signed the Finance for Biodiversity Pledge
SEB Investment Management AB - Sustainability Review 2023 (pdf)
Watch Johan Torgeby, President & CEO of SEB, and Hans Beyer, Chief Sustainability Officer of SEB, interview Stephen Polasky, Professor of Ecological and Environmental Economics at University of Minnesota, about the Natural Capital Project.
Petronella Engström, Sustainability specialist at SEB, talks us through what biodiversity is. Nature includes all natural systems on earth, both living and non living. It is these systems and the diversity and variety of them that gives the term biodiversity.
Lina Apsheva, a sustainable finance analyst at SEB, talks to specialists in the field. Lina and her guests discuss recent developments and forecasts for the future, and dive into specific themes within sustainable finance.
SEB's sustainability experts have extensive knowledge in areas such as climate and financing solutions, sustainable investments and regulatory development in the European Union.