Your pension fund won an award at the World Pension Summit 2023 for its approach to investing in biodiversity.
Over the last decade institutional investors (like the EAPF) became more aware of climate change as a risk to investment. Within legal limits, funds and investors have adjusted the way they invest to account for this. Even more recently it was more widely recognised that climate change and biodiversity should be seen as part of ‘one planet’ approach (one shouldn’t be separated from the other) and indeed biodiversity is a huge opportunity for tackling climate change.
Whilst always taking professional advice, we’ve developed an investment strategy that allocates 4% of our total investment on protecting and enhancing biodiversity. We’re the only Fund we know that has created such an asset class. The investments will be net-nature positive, deforestation free, reduce the carbon in atmosphere, protect and enhance biodiversity, take into account the needs of local communities and deliver the financial return we need to meet our legal requirement to act in the best long-term interests of members.
One of our investments is in sustainable forestry, in Paraguay, where at least 25% of the land is set aside for nature conservation. We don’t just ‘invest and forget’, we actively monitor our investments and we’re part of a committee to ensure that we can provide oversight and advice. It is a way we can help to ensure that the investment is delivering on all the above issues, in line with our expectations when we decided to invest.
One exciting aspect of the Paraguay investment is that motion sensor cameras captured this image of a puma. This is highly significant as this is the first confirmed sighting of pumas in the area for more than a decade.
We’ve learned lots through this investment and we’re asked frequently to present on our approach at conferences. Also, other funds ask our advice and so we’re helping to push the biodiversity agenda.
Here are some quotes from our award:
‘Excitingly, the EAPF is already showing that investments in natural capital can be net nature positive and reduce carbon in the atmosphere. Investments can also build resilience to a changing climate and deliver benefits for local communities, all while delivering financial returns needed to keep the pension fund fit for the long term.’
‘After reviewing this groundbreaking decision to create a new asset class on natural capital, the judging panel concluded that; “This is innovation at its peak.”’.