Finance for One Planet CoP Financial Institutions and Natural Capital
Caroline van Leenders and Anne-Marie Bor COLOPHON
FINANCE FOR ONE PLANET CoP Financial Institutions and Natural Capital Share publication Text Caroline van Leenders, Netherlands Enterprise Agency (RVO) Anne-Marie Bor, AMBOR creatie
Photo on cover Ted van den Bergh
Editing Alexandra Dawe
Design Lawine gra!sch ontwerp
This publication is available at www.rvo.nl/CoP_FINC www.amborcreatie.nl/en/CoP_FINC
Participants in CoP Financial Institutions and Natural Capital
Copyright © 2016 CONTENTS Contents ›› ACTIAM: Focus on water, climate ›› SNS Bank: Engage others in and land sustainable ambition
COLLABORATION for ecosystems Preface 4 The MATERIALITY of natural capital 3 8 in need Summary 5 ›› ASN Bank: Small bank provokes ›››› SPFHeineken: Beheer: Blijf Natural dromen capital en durf in Epilogue 85 green !nance transition strategicte verleiden portfolio and impact investing PARTICIPANTS 86 How to MEASURE impact? TRUE RISK 4 9 References 87 ›› De Friesland Zorgverzekeraar: ›› StartGreen: Financing natural Using the value of nature capital Abbreviations 90 CLIMATE change and Finance FOR ONE PLANET 5 carbon accounting 10
›› ABN AMRO: Natural capital ›› FMO: Nature as starting point leads to ›› relevant in different asset classes new partners Triodos: Pollinating !nance
; too little, too much The Dutch COP FINC WATER 1 6 and too polluted “Presencing is helping ›› Achmea: Climate risks change ›› ING: Natural capital is material for insurance business sustainable !nance the future to emerge” Otto Scharmer 2 What is NATURAL CAPiTAL? 7 LAND use and degradation
CONTENTS PREFACE ›› ABN AMRO 1 COP FINC Studies clearly show that 15 years from now there will be an additional 3 billion middle ›› Achmea class consumers joining the global economy wanting access to electricity, transportation, communication and health care. The world will need three times more resources than it 2 NATURAL CAPITAL ›› ACTIAM 3 MATERIALITY change our global production and consumption patterns, the world will head towards an ›› ASN Bank 4 MEASURE ›› De Friesland 5 CLIMATE ›› FMO 6 WATER anticipate and adapt sustainability. The urgent need for shifting away from fossil fuels to mitigate climate change implies that reserves on the ›› ING 7 LAND ›› SNS Bank 8 COLLABORATION ›› SPF Beheer 9 TRUE RISK ›› StartGreen Coming together is a beginning Keeping together is progress 10 ONE PLANET Working together is success ›› Triodos 4
CONTENTS
SUMMARY ›› ABN AMRO 1 COP FINC The value of nature is gaining attention in the Prior to choosing an impact approach ›› Achmea 1 4 for natural capital, the should institutions. In transition terms, the sector is in 2 NATURAL CAPITAL the second so called . The ›› ACTIAM (CoP FINC), formed by a group of 15 3 MATERIALITY ›› ASN Bank from each other, is an instrument to accelerate the institutions can use them as for transition to third critical mass phase. measuring the impact of their investments. 4 MEASURE ›› De Friesland The , inspired 2 that people depend on, 5 by frontrunners and international campaigns, 5 CLIMATE while responsible investors are stepping up ›› FMO scale and time. Their resilience is dependent on institutions acknowledge that their carbon 6 WATER emissions should be lowered and some have ›› ING forms on the planet and is in urgent decline. Some developed related . In the have a bigger than others. 7 LAND Financials works on climate related methodologies ›› SNS Bank for and data. 3 8 COLLABORATION members with a variety of initiatives related to is an important ecosystem service ›› SPF Beheer natural capital. The , related to new 6 under increasing stress and risks and opportunities, . and investors start to see a direct link between water 9 TRUE RISK tools and using to investigate the relationship ›› StartGreen of investments with water ecosystems. They use it 10 ONE PLANET in engagement with investees but, the availability of on is a big barrier. ›› Triodos 5
is a large contributor to biodiversity loss, are surfacing to help highly ambitious CONTENTS 7 and nature conservation is of growing interest to 10 ›› ABN AMRO investors. Tools to indicate whether a company is involved in or how to measure 1 COP FINC the are being developed, but the sector is entering of the transition. We ›› Achmea there is a disclosed land use ecosystems a is needed and Finance For One Planet. 2 NATURAL CAPITAL ›› ACTIAM ecorestoration necessary to spread the risks. 3 MATERIALITY ›› ASN Bank Collaboration should be a fourth theme in addition to Ecosystems 4 MEASURE 8 RESILIENT sector on effective investment strategies and ›› De Friesland RESTORATION SERVICES governments and business on better disclosure of 5 CLIMATE data is needed. from a or ›› FMO will lead to . Green RESTORATIVE 6 WATER INVESTEES and can accelerate the ›› ING transition to a green economy. IMPACT INVESTEES 7 LAND
The is as the ›› SNS Bank 9 underlying ecosystems are degrading. Risk INVESTING RISK & RETURN 8 COLLABORATION . Science based ›› SPF Beheer scenario for climate FINANCIAL change are starting to act as an instrument to INSTITUTIONS 9 TRUE RISK track risks. ›› StartGreen
Figure 1: Relationship between ecosystems, sectors 10 ONE PLANET and FIs starting with ecosystems perspective. (Chapter 10) ›› Triodos 6
CONTENTS
›› ABN AMRO ›› ABN AMRO 1 COP FINC
›› Achmea 2 NATURAL CAPITAL
›› ACTIAM 3 MATERIALITY
›› ASN Bank 4 MEASURE
›› De Friesland 5 CLIMATE
›› FMO 6 WATER
›› ING 7 LAND
›› SNS Bank 8 COLLABORATION
›› SPF Beheer 9 TRUE RISK
›› StartGreen 10 ONE PLANET
›› Triodos Retail bank accelerating sustainable real estate with frontrunners
CONTENTS
Natural Capital Relevant in Different Asset Classes ›› ABN AMRO 1 COP FINC ›› Achmea 2 NATURAL CAPITAL ›› ACTIAM 3 MATERIALITY ›› ASN Bank 4 MEASURE ›› De Friesland 5 CLIMATE
›› FMO Richard started by asking himself how natural capital could 6 WATER be made relevant for the bank. “We were not familiar with the relationship with biodiversity or natural capital in our business. ›› ING 7 LAND do we have activities related to biodiversity? I found a lot of potential opportunities, and some initiatives that where not being ›› SNS Bank 8 COLLABORATION marginal, activities. I thought about our role in this Community ›› SPF Beheer of Practice and came to the conclusion that we needed to 9 TRUE RISK Richard Kooloos, Head of Sustainable and real estate developers, by engaging conversations about ›› StartGreen Banking, ABN AMRO biodiversity, supporting them to create a healthy business case 10 ONE PLANET ›› Triodos 8
The research into our hypothesis is currently taking place. CONTENTS So we started to map the product chains in which we operate. ›› ABN AMRO contact with Instituto Life, together we analysed the biodiversity 1 COP FINC ›› Achmea poverty, forced labour, and child labour overshadow the hidden natural capital costs. This kind of research is conducted in 2 NATURAL CAPITAL cooperation with and True Price ›› ACTIAM species of plants and trees are more resilient and therefore have 3 MATERIALITY ›› ASN Bank “ Because of the awareness sustainable commercial real estate is focused on achieving 4 MEASURE reductions in energy consumption. A dialogue with clients is ›› De Friesland and support of the group, 5 CLIMATE I was able to move ABN AMRO projects in which our clients included biodiversity. We saw, for ›› FMO towards an integrated agenda 6 WATER much quicker.” the avoidance of waste. Another relationship is the value of ›› ING 7 LAND a higher resistance to droughts, storms and diseases. This are undertaking starting with some of our trendsetting clients. ›› SNS Bank should lead to more stable cash flows and therefore a lower credit risk. If this is true, biodiversity leads to a more resilient 8 COLLABORATION environment for businesses and biodiversity becomes relevant are higher whilst the risk is lower. In addition, we are going to ›› SPF Beheer 9 TRUE RISK ›› StartGreen 10 ONE PLANET
›› Triodos 9
CONTENTS
›› ABN AMRO 1 COP FINC
›› Achmea 2 NATURAL CAPITAL
›› ACTIAM 3 MATERIALITY
›› ASN Bank 4 MEASURE
›› De Friesland 5 CLIMATE 1 THE DUTCH COP FINC ›› FMO 6 WATER
›› ING 7 LAND
›› SNS Bank “Real change occurs from the bottom up; it occurs person 8 COLLABORATION to person, and it almost always occurs in small groups ›› SPF Beheer 9 TRUE RISK and locales and then bubbles up and aggregates to larger ›› StartGreen vectors of change.” 10 ONE PLANET
Paul Hawken ›› Triodos
CONTENTS
COP FINC ›› ABN AMRO 1 COP FINC Regulation ›› Achmea More and more companies understand the value of the resources 2 NATURAL CAPITAL FINANCIAL ›› ACTIAM INSTITUTIONS 3 MATERIALITY ›› ASN Bank RISK & INVESTING 4 MEASURE when investing. RETURN loans credit risk ›› De Friesland shareholder value 5 CLIMATE IMPACT SECTORS (directly or through instruments, assets and institutions. The value of capital supply chain) ›› FMO DEPENDENT SECTORS 6 WATER grow. The demonstrates that sustainability factors (e.g. agriculture, tourism) ›› ING IMPACT 7 LAND than half a decade ago, others integrated principles for DEPENDENT disruption responsible investment at the start of the in pollution ›› SNS Bank 8 COLLABORATION
These days more mainstream banks, pension funds and Ecosystems ›› SPF Beheer insurance companies are starting to take natural capital into 9 TRUE RISK account when making investment and lending decisions. ›› StartGreen and are developing tools to measure impact in numbers. 10 ONE PLANET investment sectors and ecosystems. Based on IUCN, 2007: and CoP Business and Biodiversity, 2015 ›› Triodos 11
CONTENTS Morgan Stanley Stakeholders collaborate to tackle obstacles that inhibit only one dollar was invested in a sustainable way. Two years sustainability and governments institutionalize the agenda and ›› ABN AMRO 1 COP FINC strong link between corporate sustainably performance and institutionalization, the sector has effectively put an end to practices that are environmentally damaging or socially ›› Achmea 2 NATURAL CAPITAL MIT Sloan visit . products has grown and since the Climate Summit in Paris in ›› ACTIAM 3 MATERIALITY retail banks and some small private investors and a second ›› ASN Bank 4 MEASURE of formation consultancy on the state of the green ›› De Friesland 5 CLIMATE ›› FMO movers phase, market demand leads to the emergence of more 6 WATER organized and visible sustainability initiatives. Inclusive and paper. structural change takes place in the third critical mass phase. ›› ING 7 LAND 1 inception 3 critical mass 4 institutionalization ›› SNS Bank 8 COLLABORATION
›› SPF Beheer 9 TRUE RISK
›› StartGreen 10 ONE PLANET Figure 3: Four stages of market transformation. Source: New Foresight ›› Triodos 12
CONTENTS ›› ABN AMRO 1 COP FINC relationship between investments and natural capital in ›› Achmea conjunction with others in the sector ( 2 NATURAL CAPITAL had been a member of the former ›› ACTIAM 3 MATERIALITY A CoP is a network of people who are intrinsically motivated, ›› ASN Bank open to cooperate and who want to discover new pathways. In a 4 MEASURE CoP people bring knowledge, learn from each other and take the CoP Financial Institutions and Natural Capital at insights back to their daily practice. See tip 4 in ten tips for Clever the Roggebotstaete. ›› De Friesland Change 5 CLIMATE ›› FMO the green 6 WATER growth policy for natural capital. ›› ING Transition management is not only about different phases 7 LAND circular economy. Although we see such an economic concept as ›› SNS Bank 8 COLLABORATION planets natural capital, it is not part of this publication. front running and mainstream banks, a pension fund, two insurance ›› SPF Beheer 9 TRUE RISK agenda for the meetings that followed. The group was set to ›› StartGreen organised at a location related to natural capital and the 10 ONE PLANET business of one of the members. All members prepared for each meeting by doing homework and for some meetings speakers ›› Triodos 13
CONTENTS “We move down one side of the U (connecting us to the world that is outside of our institutional bubble) to the bottom of the U ›› ABN AMRO and an event on learning from nature (see chapter 9). A summary (connecting us to the world that emerges from within) and up the 1 COP FINC was made publicly available after each meeting. The insights of the meetings are the basis for this publication. In the summer of Theory U as a source of inspiration, the lessons learned in the ›› Achmea CoP are structured likewise in this publication. 2 NATURAL CAPITAL
›› ACTIAM CO-INITIATING CO-EVOLVING 3 MATERIALITY The following chapters focus on the materiality of natural capital 1 ›› ASN Bank sensing in chapter 3 and 4). Then we arrive at the bottom of the Capital 4 MEASURE U. This phase of the process is described in the three following CO-SENSING CO-CREATING ›› De Friesland 5 CLIMATE 3 Materiality 9 True risk in these sections are summarized as deep learning at the end of 4 Measure Collaboration ›› FMO PRESENCING 6 WATER 5 Climate 6 Water Land ›› ING 7 LAND Figure 4: Structure of the chapters with lessons learned in CoP FINC based on Theory U. Source: Otto Scharmer, 2009. ›› SNS Bank 8 COLLABORATION They are the personal narratives from the members, describing ›› SPF Beheer in their practice. The chapters with general content are the 9 TRUE RISK the natural capital practice of the participants. The generic responsibility of the authors. The content in the last three lessons are described in this publication. Looking back at the ›› StartGreen Theory U. developments. We as authors felt the need to crystalize this into 10 ONE PLANET ›› Triodos 14
CONTENTS
›› ABN AMRO ›› Achmea 1 COP FINC
›› Achmea 2 NATURAL CAPITAL
›› ACTIAM 3 MATERIALITY
›› ASN Bank 4 MEASURE
›› De Friesland 5 CLIMATE
›› FMO 6 WATER
›› ING 7 LAND
›› SNS Bank 8 COLLABORATION
›› SPF Beheer 9 TRUE RISK
›› StartGreen 10 ONE PLANET
›› Triodos Insurer in search for resilient cities
CONTENTS
Climate Risks change Insurance Business ›› ABN AMRO 1 COP FINC ›› Achmea 2 NATURAL CAPITAL ›› ACTIAM 3 MATERIALITY ›› ASN Bank 4 MEASURE the insurance industry, its clients and for society at large. We ›› De Friesland 5 CLIMATE climate change is high on the agenda of the insurance industry ›› FMO to come up with risk solutions for both its individual clients and 6 WATER society at large. Improving resilience by preventative measures, ›› ING on an individual and collective level, reduces the risks and keeps 7 LAND Achmea is looking for ways to prevent damage and thus lowering ›› SNS Bank 8 COLLABORATION Green Roofs ›› SPF Beheer be a way to adapt to the changing risk landscape. When I came 9 TRUE RISK Liesbeth van der Kruit, Sustainability across the . I decided to use this as a ›› StartGreen Manager, Achmea for an insurance company and its clients. As such I started 10 ONE PLANET researching, asked a colleague from the damage insurance ›› Triodos 16 department for help and began connecting the dots. I discovered CONTENTS that as a nature based solution, green roofs can play an important ›› ABN AMRO role in buffering water. This prevents considerable damage caused by climate change related weather events. I am convinced that 1 COP FINC nature based solutions are essential for climate adaptation and The investee has to improve its practices within three years. ›› Achmea thus play an important role in the resilience of households, These agreements are binding, meaning that if the company falls companies and public infrastructure. I see it as my job to raise 2 NATURAL CAPITAL awareness among my colleagues that we can truly contribute to ›› ACTIAM 3 MATERIALITY
›› ASN Bank “ I now realize that the uptake of 4 MEASURE
nature based solutions could be ›› De Friesland a way to adapt to the risks of 5 CLIMATE climate change.” ›› FMO 6 WATER
›› ING Under the programme, we engaged with 7 LAND water management and improved reporting on water use. Due to ›› SNS Bank our involvement, the snack producer has mapped its dependency on water and made an overview of other water users in the 8 COLLABORATION ›› SPF Beheer 9 TRUE RISK Menno van Lieshout, Senior CSR Advisor, As a result of this successful engagement, the company now ›› StartGreen Achmea has structural reporting on around water issues. The enhanced engagement has shown the importance of managing the water 10 ONE PLANET ›› Triodos assessment with the 17
CONTENTS
›› ABN AMRO 1 COP FINC
›› Achmea 2 NATURAL CAPITAL
›› ACTIAM 3 MATERIALITY
›› ASN Bank 4 MEASURE
›› De Friesland 5 CLIMATE 2 WHAT IS NATURAL CAPITAL? ›› FMO 6 WATER
›› ING 7 LAND “The wealth of the nation is its air, water, soil, forests, minerals, ›› SNS Bank rivers, lakes, oceans, scenic beauty, wildlife habitats and 8 COLLABORATION biodiversity… that’s all there is. That’s where all the economic ›› SPF Beheer 9 TRUE RISK activity and jobs come from. These biological systems are the ›› StartGreen sustaining wealth of the world.” 10 ONE PLANET
Gaylord Nelson ›› Triodos
CONTENTS NATURAL CAPITAL ›› ABN AMRO 1 COP FINC ecosystem services are dunes that purify water, pollination by ›› Achmea In the natural capital is another 2 NATURAL CAPITAL part of more than one , including resources (e.g. plants, animals, air, water, soils, minerals) that ›› ACTIAM 3 MATERIALITY Capital Declaration life below water and life on land. ›› ASN Bank and services for our economy and that offers advantages to 4 MEASURE ›› De Friesland natural capital comprises all the ecosystem Cultural Health Recreation 5 CLIMATE goods and services combined, and that Production services history Regulating services the natural production of ecosystems is Cultural services Timber ›› FMO fundamental for the basis for our economy. Supporting services 6 WATER People and economies depend on ecosystem services and influence them. ›› ING resources 7 LAND ›› SNS Bank Pollination 8 COLLABORATION hot, and that they have been hot for a while. Carbon storage ›› SPF Beheer article about the societal value produced by 9 TRUE RISK ecosystems through ecosystem service delivery, Pest mitigation ›› StartGreen Soil Primary Water 10 ONE PLANET Assessment framed the need to protect formation production cycling regulation Figure 5: Four types of ecosystem services (source: PBL, 2010) ›› Triodos 19
CONTENTS ‘Helping nature to help us usually more resilient than systems with fewer species. So ›› ABN AMRO 1 COP FINC whole week case studies, methods, data and governance topics Convention ›› Achmea were shared with little attendance of people from companies or 2 NATURAL CAPITAL ›› ACTIAM second level is about species and the third level about the variety 3 MATERIALITY wide, and globally biodiversity has declined on all three levels ›› ASN Bank feature of an ecosystem is the connection and interaction and on all scales. 4 MEASURE between all organisms, and between inanimate objects like rocks ›› De Friesland dimension. An ecosystem delivers services at a local, regional 5 CLIMATE ›› FMO atmosphere is an ecosystem on a global scale, fresh water as a ECOSYSTEMS 6 WATER service is provided by more regional or local ecosystems such as watersheds, lakes, ponds and rivers. Also ecosystems on ›› ING 7 LAND SPECIES ›› SNS Bank ecosystems and services to identify hotspots of change and for 8 COLLABORATION the better provisioning of ecosystem services through the spatial GENES ›› SPF Beheer that the concept of ecosystem services (and thus natural capital, 9 TRUE RISK ›› StartGreen wetlands). Figure 6: Biodiversity at three levels. Source: Biodiversity British Columbia 10 ONE PLANET
›› Triodos 20
CONTENTS sectors reveals that food and stimulant industry has a global ›› ABN AMRO 1 COP FINC was that an ecosystem perspective leads to innovation and that through an ecosystem perspective new partners are found. ›› Achmea 2 NATURAL CAPITAL natural resources like soy and palm oil from abroad. ›› ACTIAM biodiversity is of growing relevance for the private sector, only 3 MATERIALITY a few instruments, guiding principles and best practices were signals that biodiversity and ›› ASN Bank timber sectors, for which land productivity is a key aspect ecosystem services will increasingly become more and more part 4 MEASURE for future survival. More and more businesses realise that of risk analyses and management systems. ›› De Friesland Lambooij described interesting cases 5 CLIMATE production sites. In a previous CoP on ›› FMO giving comments and feedback. In the 6 WATER a description of the relation between business sectors and natural capital can be found. ›› ING 7 LAND ›› SNS Bank 8 COLLABORATION international programs aiming to value natural capital are also and ›› SPF Beheer . 9 TRUE RISK . ›› StartGreen 10 ONE PLANET research programme on natural ›› Triodos 21
CONTENTS new concept and that actors such as government, companies of the main conclusions of the study is that a natural capital ›› ABN AMRO 1 COP FINC of discovering what natural capital means for them and how it ›› Achmea such a large variety of ways and is so much still being developed 2 NATURAL CAPITAL
›› ACTIAM OTHER CAPITALS NATURAL CAPITAL Interactions 3 MATERIALITY ecosystem services ›› ASN Bank Dependencies 4 MEASURE ECONOMY & SOCIETY pharmaceuticals ›› De Friesland 5 CLIMATE BUSINESS Impacts Climate control, water treatment, natural hazard positive & moderation, pollination negative ›› FMO Primary production, water cycling, nutrient cycling, seed 6 WATER dispersal ›› ING Recreation, tourism, ethical values, aesthetic values, education 7 LAND environmental stocks & assets ›› SNS Bank
IMPACT ON CORPORATE VALUE biodiversity & ecosystems 8 COLLABORATION natural resources & other environmental features ›› SPF Beheer 9 TRUE RISK
›› StartGreen Figure 7: Relationship between natural capital, business and corporate value. Source: VBDO and CREM, 2015 (adapted from Acca, FFI and KPMG, 2012). 10 ONE PLANET
›› Triodos 22
CONTENTS
›› ABN AMRO ›› ACTIAM 1 COP FINC
›› Achmea 2 NATURAL CAPITAL
›› ACTIAM 3 MATERIALITY
›› ASN Bank 4 MEASURE
›› De Friesland 5 CLIMATE
›› FMO 6 WATER
›› ING 7 LAND
›› SNS Bank 8 COLLABORATION
›› SPF Beheer 9 TRUE RISK
›› StartGreen 10 ONE PLANET
›› Triodos Institutional investor enhancing the building sector to use FSC timber
CONTENTS
Focus on Water, Climate and Land ›› ABN AMRO 1 COP FINC ›› Achmea 2 NATURAL CAPITAL ›› ACTIAM 3 MATERIALITY ›› ASN Bank 4 MEASURE ›› De Friesland 5 CLIMATE global trends and challenges such as population growth, and ›› FMO 6 WATER ›› ING (voting and engagement) are very important in achieving these 7 LAND we need to see behavioural change of companies and societies. ›› SNS Bank 8 COLLABORATION owner or lender to a company to stimulate that behavioural change. We are also actively involved in the green bonds market ›› SPF Beheer 9 TRUE RISK ›› StartGreen Maxime Molenaar, ESG-Analyst, ACTIAM Through initiatives such as the Multi Stakeholder Dialogue 10 ONE PLANET Landgovernance , and ›› Triodos 24
CONTENTS investing in companies that drill oil in the Artic, which included ›› ABN AMRO 1 COP FINC for Action, stating our commitment to the Paris Agreement. And we joined the Helping to achieve the SDGs ›› Achmea 2 NATURAL CAPITAL water and sanitation, we want to optimise the integration of on climate change and make the results comparable. We also ›› ACTIAM actively collaborate with other organisations on the topic of great interest in comparing companies by the present and future 3 MATERIALITY ›› ASN Bank 4 MEASURE
“ What is more important: the impact ›› De Friesland or the quality of the data?” 5 CLIMATE ›› FMO 6 WATER resilience strategies. However, this remains a challenge due to ›› ING 7 LAND different stakeholders like CDP, WRI, and other investors. We use engagement and voting to improve water disclosure and ›› SNS Bank water stewardship, especially in high risk sectors like mining, 8 COLLABORATION utilities and food & beverages. We want companies to understand and monitor their water risks and to act upon that risk. ACTIAM is ›› SPF Beheer part of the PRI Water Risks Advisory Committee. This year we 9 TRUE RISK Kristel Verhoef, Active Ownership asking them to disclose information through the CDP Water ›› StartGreen Specialist, ACTIAM 10 ONE PLANET ›› Triodos 25
CONTENTS
›› ABN AMRO 1 COP FINC
›› Achmea 2 NATURAL CAPITAL
›› ACTIAM 3 MATERIALITY
›› ASN Bank 4 MEASURE
›› De Friesland 5 CLIMATE 3 THE MATERIALITY OF ›› FMO 6 WATER NATURAL CAPITAL ›› ING 7 LAND
›› SNS Bank 8 COLLABORATION
›› SPF Beheer 9 TRUE RISK “We use nature because it’s valuable, but we lose it because ›› StartGreen it’s free.” 10 ONE PLANET
Pavan Sukhdev, director TEEB ›› Triodos
CONTENTS The Impact Investor Survey ‘Spotlight on the Market MATERIALITY ›› ABN AMRO 1 COP FINC Annual Impact Report ›› Achmea 2 NATURAL CAPITAL ›› ACTIAM performance ( . The 3 MATERIALITY Term Value and Performance and Demystifying Responsible impact investing market today is large enough to publish special Investment Performance. guides on impact investing such as Catalysing Wealth for Change ›› ASN Bank guide for banks 4 MEASURE Signs of the materiality of natural capital themes can also be ›› De Friesland 5 CLIMATE
›› FMO RISK REVENUE LICENCE TO MANAGEMENT GROWTH INNOVATION OPERATE MARKET ACCESS 6 WATER ›› ING BUSINESS COST PRODUCTIVITY BRAND CAPITAL ACCESS OPPORTUNITIES SAVINGS ENHANCEMENT 7 LAND
›› SNS Bank Figure 8: CDC ESG value drivers. Source: CDC, 2010 and WWF, 2014 8 COLLABORATION
The found that ›› SPF Beheer Sustainalytics is reporting more on issues such as water and land 9 TRUE RISK use and Morningstar (in collaboration with Sustainalytics) started to screen funds on sustainability in general, but also published ›› StartGreen Alliance). The 10 ONE PLANET
›› Triodos 27
CONTENTS In the the ›› ABN AMRO 1 COP FINC always been to bring prosperity through sustainable investing. ›› Achmea 2 NATURAL CAPITAL WHY IS NATURAL CAPITAL MATERIAL TO FINANCIAL Strategies vary from developing impact investing, to bringing ›› ACTIAM economic growth in developing countries while halving its Loss of investment returns 3 MATERIALITY (including oil, gas and mining, and agribusiness), access ›› ASN Bank demonstration that companies can manage impacts on 4 MEASURE biodiversity and ecosystem services. ›› De Friesland Differentiation and branding 5 CLIMATE with an impact investing fund and health assurance company ›› FMO 6 WATER crowdfunding platform, only accepting projects with a positive ›› ING 7 LAND a more integrated approach. ACTIAM aims to achieve positive impact through active ownership, as well as developing and ›› SNS Bank Decline in biodiversity and ecosystem services is likely to result in increased regulation 8 COLLABORATION real estate and in commodities that are not produced according ›› SPF Beheer 9 TRUE RISK little water to be a risk for certain investments, while insurer Achmea faces the risk of high insurance costs because of ›› StartGreen climate change. 10 ONE PLANET
›› Triodos 28
CONTENTS have positive natural capital impact considerations or wanting ›› ABN AMRO 1 COP FINC ›› Achmea last decade the sector has made a lot of progress with respect 2 NATURAL CAPITAL to integrating natural capital in investment decisions. These ›› ACTIAM integration for some time, are becoming more value driven and 3 MATERIALITY frontrunners on impact investing are discovering that even they are doing harm to certain ecosystems. ›› ASN Bank 4 MEASURE we can learn from the way nature works. At the invitation of ›› De Friesland 5 CLIMATE , visited special meeting ›› FMO 6 WATER ›› ING sector has grown out of proportion in relation to the underlying 7 LAND ›› SNS Bank the real world. This has implications for the distinction between 8 COLLABORATION risk and uncertainty. While current risk models can be helpful in dealing with certain types of risk, they do a poor job of dealing ›› SPF Beheer 9 TRUE RISK In order to understand more about the risks related to impact on ›› StartGreen measure the impacts and dependencies of their investments. More 10 ONE PLANET on the art of biomimicry can be found on the . ›› Triodos 29
CONTENTS
›› ABN AMRO ›› ASN Bank 1 COP FINC
›› Achmea 2 NATURAL CAPITAL
›› ACTIAM 3 MATERIALITY
›› ASN Bank 4 MEASURE
›› De Friesland 5 CLIMATE
›› FMO 6 WATER
›› ING 7 LAND
›› SNS Bank 8 COLLABORATION
›› SPF Beheer 9 TRUE RISK
›› StartGreen 10 ONE PLANET
›› Triodos Sustainable bank investing in mission zero carpet tile producer Interface
CONTENTS
Small Bank Provokes Green Finance Transition ›› ABN AMRO 1 COP FINC ›› Achmea 2 NATURAL CAPITAL ›› ACTIAM 3 MATERIALITY
›› ASN Bank Community of Practice on , we learned from carpet producer 4 MEASURE ›› De Friesland then we have been working on the ambition to become climate neutral 5 CLIMATE ›› FMO 6 WATER ›› ING initiated the Dutch Carbon Pledge and launched the Dutch ) together with a 7 LAND ›› SNS Bank Summit in Paris. In this document, we called on negotiators to 8 COLLABORATION ›› SPF Beheer
9 TRUE RISK Jeroen Loots, Climate and ›› StartGreen Biodiversity Advisor, ASN Bank 10 ONE PLANET ›› Triodos 31
As a bank, is it even possible to determine the impact of our We are working to set a long term goal on biodiversity like we did CONTENTS ›› ABN AMRO do you calculate and describe this impact? What can we do to could be an ambition. Actions like actively investing in nature and reach your goal? We asked for help from consultants and engaging on biodiversity impact with investees with a high 1 COP FINC PRé and with the ReCiPe method, they calculated the impact of ›› Achmea formulated goal and a clear path has just started, but we made important steps and there is a shared enthusiasm and enough 2 NATURAL CAPITAL ›› ACTIAM 3 MATERIALITY “ The CoP was an excellent ›› ASN Bank stakeholders. opportunity and practical 4 MEASURE platform to inspire and team ›› De Friesland 5 CLIMATE up with !nance colleagues ›› FMO towards a sustainable society.” 6 WATER
›› ING 7 LAND ›› SNS Bank 8 COLLABORATION ›› SPF Beheer Piet Sprengers, Head Sustainability relevant stakeholders. We believe that, even though we are a 9 TRUE RISK and Irene de Jong, Climate and small bank, it is possible to accelerate change as a pioneer. The ›› StartGreen Biodiversity Advisor, ASN Bank CoP was a driving force for us. A place where we could reflect 10 ONE PLANET ›› Triodos 32
CONTENTS
›› ABN AMRO 1 COP FINC
›› Achmea 2 NATURAL CAPITAL
›› ACTIAM 3 MATERIALITY
›› ASN Bank 4 MEASURE
›› De Friesland 5 CLIMATE 4 HOW TO MEASURE IMPACT ? ›› FMO 6 WATER
›› ING 7 LAND
›› SNS Bank 8 COLLABORATION
“Taking action on natural capital requires developing and ›› SPF Beheer articulating a strong internal business case for doing so, 9 TRUE RISK clear objectives around measurement, and valuation and ›› StartGreen 10 ONE PLANET application in decision-making.” ›› Triodos Mark Gough, Executive Director, Natural Capital Coalition
CONTENTS ecosystem services were made by the production of leather MEASURE ›› ABN AMRO reported on the 1 COP FINC ›› Achmea Prior to choosing an approach on how to measure impact on negative, mainly due to the use of oil and natural gas and 2 NATURAL CAPITAL natural capital, it is important to decide on the aim and focus of Dutch Railway ›› ACTIAM Company 3 MATERIALITY ›› ASN Bank reputational and regulatory risks associated with natural capital. 4 MEASURE To determine the natural capital a business uses, a special impact of nature on human health. Through this it is possible to ›› De Friesland see that the answer relates to the ambition and sense of 5 CLIMATE international coalition of businesses. This cooperation is known as the ›› FMO Capital Protocol 6 WATER portfolio? Who is the target group for the outcome? Are the international framework developed to support managers in results for internal use, for engagement or for public ›› ING information about their impact on and dependency on natural 7 LAND to the overall sustainability strategy of the organisation, but also to the availability of time, data and resources. beverages and apparel were published and tested. ›› SNS Bank 8 COLLABORATION ›› SPF Beheer supported the development of the . The 9 TRUE RISK of economic sectors. The main conclusion was that the ReCiPe ›› StartGreen activities have on the ecosystem services they use, like clean 10 ONE PLANET is a useful way to measure the impact of companies on ›› Triodos 34
CONTENTS at Risk majority of unpriced natural capital costs are from greenhouse ›› ABN AMRO 1 COP FINC have the largest impact on biodiversity and are therefore strong indicators for biodiversity loss. The method was tested by three ›› Achmea 2 NATURAL CAPITAL measure the impact of their portfolio on natural capital, should ›› ACTIAM 3 MATERIALITY there is almost no reporting on land use. A study by the Dutch b. Dependency of and impact on fresh water ›› ASN Bank c. Dependency of and impact on land 4 MEASURE framework do not cover all impact on ecosystem services. To follow the process of Theory U (chapter 1), at each of the TruCost following sections on climate (chapter 5), water (chapter 6) and ›› De Friesland 5 CLIMATE multinational companies as outlined in its report l ›› FMO 6 WATER Table 1: Ranking of the 5 region-sectors by ekpi with the greatest impact across all EKPIs when measured in monetary terms. Source: TruCost. ›› ING RANK IMPACT SECTOR REGION NATURAL CAPITAL REVENUE, USD bn IMPACT RATIO COST, USD bn 7 LAND
1 Coal power 443.1 ›› SNS Bank generation 8 COLLABORATION Land Cattle ranching and South America 16.6 use farming ›› SPF Beheer 3 Iron and steel mills 9 TRUE RISK
4 Water Wheat farming Southern Asia ›› StartGreen 5 Coal power generation 10 ONE PLANET ›› Triodos 35
CONTENTS
›› ABN AMRO ›› De Friesland Zorgverzekeraar 1 COP FINC
›› Achmea 2 NATURAL CAPITAL
›› ACTIAM 3 MATERIALITY
›› ASN Bank 4 MEASURE
›› De Friesland 5 CLIMATE
›› FMO 6 WATER
›› ING 7 LAND
›› SNS Bank 8 COLLABORATION
›› SPF Beheer 9 TRUE RISK
›› StartGreen 10 ONE PLANET
›› Triodos Health care insurer, preventing health care with walks in nature
CONTENTS
Using the Value of Nature ›› ABN AMRO 1 COP FINC ›› Achmea 2 NATURAL CAPITAL ›› ACTIAM 3 MATERIALITY ›› ASN Bank 4 MEASURE ›› De Friesland 5 CLIMATE ›› FMO 6 WATER ›› ING 7 LAND
›› SNS Bank 8 COLLABORATION insurance, we thought long and hard about the added value of our services for our clients. We very naturally came to the ›› SPF Beheer relationship between nature and health as the two are 9 TRUE RISK Tjisse Brookman, Relation Manager, has a preventative and healing impact. Research has shown that De Friesland Zorgverzekeraar ›› StartGreen 10 ONE PLANET different beings during weekdays, compared to their spare time. ›› Triodos 37
In weekends we walk on the beach, go biking and realize that higher level and we conduct research into behavioural aspects. CONTENTS nature has positive effects. However, in our professional life we University of ›› ABN AMRO often do not take that in consideration. It’s about raising Groningen), who researches the influence of a green environment awareness of the influence people personally have on their own on the health and wellbeing of the Dutch population. We hope to 1 C OP FINC living and working environment and their health. Our ambition is ›› Achmea to create awareness both publicly and among health providers. We started multiple initiatives with several partners in which the 2 NATURAL CAPITAL relationship between nature and health is key. Mindfulness ›› ACTIAM training within companies, coaching sessions through walking Collaboration for innovation and ‘Healthy Walks in Nature’ with volunteers that help 3 MATERIALITY compensation for preventive measures. I don’t know, it truly is a ›› ASN Bank is supported by De Friesland is www.beterinhetgroen.nl. This matchmaking widget helps citizens, schools, doctors and other have to deal with is that we need budget to invest in knowledge 4 MEASURE on prevention and nature in order to save costs in a later stage. ›› De Friesland contributions. It’s a continuous search between short-term 5 CLIMATE “ Nature requires thinking from investments versus long-term returns, both for our clients and ›› FMO 6 WATER the perspective of bene!ts ›› ING instead of the costs.” the solutions for current issues. We need to collaborate with 7 LAND ›› SNS Bank “We need to start to think differently about our business models. 8 COLLABORATION We have to move from ‘what does it cost’ to ‘what does it ›› SPF Beheer deliver?’ and from ‘sickness & health care’ to ‘health & behaviour’. 9 TRUE RISK paradigm of reducing costs. Care providers such as doctors want ›› StartGreen 10 ONE PLANET ›› Triodos 38
CONTENTS
›› ABN AMRO 1 COP FINC
›› Achmea 2 NATURAL CAPITAL
›› ACTIAM 3 MATERIALITY
›› ASN Bank 4 MEASURE
›› De Friesland 5 CLIMATE 5 CLIMATE CHANGE AND CARBON ›› FMO 6 WATER ACCOUNTING ›› ING 7 LAND
›› SNS Bank 8 COLLABORATION
›› SPF Beheer “The warnings about global warming have been extremely 9 TRUE RISK clear for a long time. We are facing a global climate crisis. ›› StartGreen 10 ONE PLANET It is deepening. We are entering a period of consequences.” ›› Triodos Al Gore
CONTENTS
CLIMATE ›› ABN AMRO 1 COP FINC
›› Achmea 2 NATURAL CAPITAL and flooding, has huge impact on biodiversity and contributes to the decline of natural capital. Climate ambitions have been on the ›› ACTIAM 3 MATERIALITY never invested in the fossil fuel sector or started to divest years ›› ASN Bank investing in coal, oil and gas companies. Responsible investors 4 MEASURE have been engaging with companies in the fossil fuel sector on themes such as drilling in the Artic. ›› De Friesland Workers checking the salt water coming through the drainage 5 CLIMATE of the divestment movement started by the . They system at Miami Beach. Its believed that this area needs to be in the atmosphere evacuated by 2060. Photo: Kadir van Lohuizen / NOOR ›› FMO 6 WATER changes in our climate. The divestment movement was ›› ING to campaign against climate change under the title ‘keep it in the 7 LAND Carbon Tracker, Carbon Disclosure Project and ›› SNS Bank Project 8 COLLABORATION on institutional investors to divest. assets and the last benchmarks institutional investors on the transparency of the carbon footprint from assets in their ›› SPF Beheer portfolio. 9 TRUE RISK statement made by Mark Carney, the ›› StartGreen divested from or coal or the whole fossil fuel sector. As result of 10 ONE PLANET all the media attention, the number of fund managers who decided to divest in fossil fuels rose fast. ›› Triodos 40
CONTENTS Montreal Pledge. This is an initiative of the by which investors promise to disclose ›› ABN AMRO their carbon footprint on at least an annual basis. 1 COP FINC Parallel to the development of the divestment movement, front running institutional investors have been engaging with their ›› Achmea investees in the fossil sector. During annual shareholder and published their carbon footprint and in some cases 2 NATURAL CAPITAL meetings and in bilateral talks, they have been urging them to change course to a green energy system. After divesting it is white paper on adapting ›› ACTIAM about investing in the green transition. Like The Rockefeller portfolios to climate change. 3 MATERIALITY foundation, that took a share in a green electricity company as ›› ASN Bank 4 MEASURE Divesting from the fossil fuel sector is important in the combat of Platform Carbon ›› De Friesland 5 CLIMATE companies that cause greenhouse gas emissions, like institutions joined. Together they will develop harmonized methods to measure the impact that their investments and loans ›› FMO companies from their investment spectrum, are still contributing 6 WATER to climate change. collaborate with Dutch pension funds. ›› ING Carpet and floor tile company Interface has formulated a zero 7 LAND emission strategy Dutch Carbon sharing natural capital practice in the Pledge when it called on negotiators to pay due regard to the role ›› SNS Bank 8 COLLABORATION possible for a bank to what is necessary for the planet. It ›› SPF Beheer 9 TRUE RISK IPCC and the political ambition to keep of banks in relation to climate change. ›› StartGreen it developed a carbon accounting method and made it 10 ONE PLANET open source available on its website. With this ambition and ›› Triodos 41
CONTENTS , to end subsidies ›› ABN AMRO for the fossil industry and to help them to cooperate in obtaining 1 COP FINC the necessary data. The second event was a workshop with ›› Achmea 2 NATURAL CAPITAL called for validated open source data. The need for this call is strengthened by three former Treasury secretaries who recently ›› ACTIAM 3 MATERIALITY ). Dutch Financial Institutions at the climate summit in Paris (2015) ›› ASN Bank 4 MEASURE During the climate summit in Paris two events were organised in ›› De Friesland 5 CLIMATE , Deep Learning and ›› FMO We were able to evolve as a species because of this stability 6 WATER represented. They were asked about their ambitions and . Some had set ›› ING 7 LAND in oceans and land). ›› SNS Bank invested differently in 4 years. They started carbon accounting connected to that ecosystem have to work together. 8 COLLABORATION because of social pressure from the fossil free movement, out of ›› SPF Beheer dependency. 9 TRUE RISK to a zero carbon economy. ›› StartGreen 10 ONE PLANET
›› Triodos 42
CONTENTS
›› ABN AMRO ›› FMO 1 COP FINC
›› Achmea 2 NATURAL CAPITAL
›› ACTIAM 3 MATERIALITY
›› ASN Bank 4 MEASURE
›› De Friesland 5 CLIMATE
›› FMO 6 WATER
›› ING 7 LAND
›› SNS Bank 8 COLLABORATION
›› SPF Beheer 9 TRUE RISK
›› StartGreen 10 ONE PLANET
›› Triodos Development bank engaging with investees on its water-footprint
Photo: Opmeer Reports
CONTENTS
Nature as Starting Point Leads to New Partners ›› ABN AMRO 1 COP FINC ›› Achmea 2 NATURAL CAPITAL ›› ACTIAM 3 MATERIALITY
›› ASN Bank implementation 4 MEASURE ›› De Friesland 5 CLIMATE comprehensively. The challenge is how to gather impact data ›› FMO 6 WATER to address. Climate Change is already affecting us today, and the ›› ING impact on our clients in developing countries is even more 7 LAND ›› SNS Bank 8 COLLABORATION ›› SPF Beheer our investment portfolio. A practical approach, transparency and 9 TRUE RISK Mariya Soshinskaya, ›› StartGreen Sustainability Of!cer, FMO 10 ONE PLANET
›› Triodos 44
The study found that pollution caused by water use has the CONTENTS biggest impact, especially in agribusiness and that we need to ›› ABN AMRO 1 COP FINC according the . Again, clients in emerging we are performing a portfolio water risk analysis to start building ›› Achmea awareness of the relevance of water with our clients. We start with risk hotspots at portfolio level and then hope to identify water 2 NATURAL CAPITAL the of three agricultural clients. ›› ACTIAM
3 MATERIALITY “ Every Financial Institution needs “Through our participation in the CoP we learned that measuring ›› ASN Bank the impact on biodiversity can be done with different indicators 4 MEASURE to play their own part in the until we can implement impact measurement of biodiversity ›› De Friesland transition according to their across our portfolio. In the meantime, we manage our impact on biodiversity and ensure that it is protected with our 5 CLIMATE speci!c activities and capacities.” mitigation framework ›› FMO department issues Sustainability bonds 6 WATER ›› ING 7 LAND ›› SNS Bank 8 COLLABORATION
›› SPF Beheer paradigm and looking how natural capital contributes to the 9 TRUE RISK Beatrijs van Manen, ›› StartGreen Sustainability Of!cer, FMO 10 ONE PLANET ›› Triodos 45
CONTENTS
›› ABN AMRO 1 COP FINC
›› Achmea 2 NATURAL CAPITAL
›› ACTIAM 3 MATERIALITY
›› ASN Bank 4 MEASURE
›› De Friesland 5 CLIMATE 6 water: TOO LITTLE, TOO MUCH ›› FMO 6 WATER AND TOO POLLUTED ›› ING 7 LAND
›› SNS Bank 8 COLLABORATION
“I’ve been heartened to see that a large number of organisations ›› SPF Beheer are responding to the growing water challenges, many of which 9 TRUE RISK share our vision of a world where fresh water sustains thriving ›› StartGreen 10 ONE PLANET communities and nature’s diversity.” ›› Triodos Ruth Mathews, Executive Director Water Footprint Network
CONTENTS
WATER ›› ABN AMRO 1 COP FINC
›› Achmea 2 NATURAL CAPITAL processes is a very important ecosystem service. According to biggest future All water on Earth ›› ACTIAM risks 3 MATERIALITY All freshwater on Earth ›› ASN Bank 4 MEASURE All water in rivers agriculture. Then droughts can have a material impact on and lakes on Earth ›› De Friesland 5 CLIMATE protection. Seven countries, including the United States, China and India, are prone to flooding as well as water stress. In relation ›› FMO to flooding especially reinsurance companies like Credit Swiss 6 WATER Figure 9: All water on earth, also showing the amount of ›› ING fresh water, and water in rivers and lakes. (source: USGS) 7 LAND ›› SNS Bank Water ecosystems have a regional and local scale. To gain 8 COLLABORATION insight in the resilience of water ecosystems the World Resource ‘Too Little, Too Much Institute has developed a worldwide map called which ›› SPF Beheer is now being used by sustainable banks, responsible institutional 9 TRUE RISK regulatory regime related to fresh water will be strengthened in ›› StartGreen the coming years with more regulation and other government and other water users to identify where and how water risks and 10 ONE PLANET interventions. opportunities are emerging worldwide. Companies like Heineken ›› Triodos 47
CONTENTS have developed watershed management with all ecosystem stakeholders at some of their production sites in dry areas (see ›› ABN AMRO multinationals depending on fresh water such as Heineken and 1 COP FINC Coca Cola, that if one wants to maintain a resilient ecosystem, are described in governing water ecosystems. one has to work at the location and scale of the ecosystem itself. ›› Achmea So a method had to provide information at on the dimension of a 2 NATURAL CAPITAL dependency and impact of their investments on water. To lower combine overall maps with local data, leading to water ›› ACTIAM 3 MATERIALITY water management and waste water treatment is on the rise. assessment tool to identify whether the project lies in a water ›› ASN Bank Some banks have special water investment funds or they include 4 MEASURE certain water companies in green funds. Institutional investors detailed engagement with clients on the actual amount of water not only engage on water as a strategy to avoid risks, they also ›› De Friesland want to use their influence for a more sustainable future. They 5 CLIMATE situation by motivating the client to engage with other water users that rely on the local watershed. ›› FMO their relationships with water ecosystems, in what state they are 6 WATER and who the other users are? ›› ING model 7 LAND 1. Water dependency (operations and sector and product double its impact, (i.e. numbers of jobs) and halve its ›› SNS Bank 8 COLLABORATION 3. Company response (water management, water stewardship) pollution are important issues in the developing countries in ›› SPF Beheer The together with signatory 9 TRUE RISK accounting, they decided to focus on the impact of their portfolio RobecoSam developed a on water. ›› StartGreen investments from good to moderate and the material effect on 10 ONE PLANET credit rating. They can also use it to calculate a shadow price of water and thus the total economic value of water for an ›› Triodos 48
CONTENTS
Deep Learning ›› ABN AMRO 1 COP FINC input for engagement. The water risk evaluation tool is now part of the and has been downloaded more than agriculture, industrial production, and recreation. Many water ›› Achmea ecosystems are being severely damaged. 2 NATURAL CAPITAL is developing new projects aimed at understanding the management it is possible to know about water usage by companies like Heineken, while water saving innovations ›› ACTIAM connection between drought and flood risks with credit risk. provide an opportunity. 3 MATERIALITY screening. Some companies then use detailed maps of water ›› ASN Bank the topic of water management with their investees and they ecosystems, local knowledge and engage with investees on 4 MEASURE risk evaluation tool to classify investments and the material effect of water risk on credit rating. ›› De Friesland data on corporate water risks is a big barrier for them. Most 5 CLIMATE resilient. ›› FMO on, let alone on the way they respond to future water risks. They 6 WATER on local water dependency and impact of investments is a ›› ING the way forward. Mandatory disclosure for companies on water 7 LAND impact data like for climate change is being developed. ›› SNS Bank 8 COLLABORATION
›› SPF Beheer 9 TRUE RISK
›› StartGreen 10 ONE PLANET
›› Triodos 49
CONTENTS
›› ABN AMRO ›› ING 1 COP FINC
›› Achmea 2 NATURAL CAPITAL
›› ACTIAM 3 MATERIALITY
›› ASN Bank 4 MEASURE
›› De Friesland 5 CLIMATE
›› FMO 6 WATER
›› ING 7 LAND
›› SNS Bank 8 COLLABORATION
›› SPF Beheer 9 TRUE RISK
›› StartGreen 10 ONE PLANET
›› Triodos Retail bank clarifying the water risks of economic sectors
CONTENTS
Natural Capital is Material for Sustainable Finance ›› ABN AMRO 1 COP FINC ING ›› Achmea 2 NATURAL CAPITAL ›› ACTIAM 3 MATERIALITY ›› ASN Bank 4 MEASURE environmental and social sensitivities at both the client and ›› De Friesland 5 CLIMATE against the to ensure compliance before we do business. Depending on the sector the client is active in, ›› FMO 6 WATER looking at water management, air pollution, soil erosion, land degradation, and natural stock depletion. The outcome of the ›› ING 7 LAND ›› SNS Bank 8 COLLABORATION ›› SPF Beheer 9 TRUE RISK Rikjan van Zalingen, Issue Manager and Armand Ferreira, Sustainable Finance ›› StartGreen Director, ING Sustainable 10 ONE PLANET team drives and promotes sustainable business ›› Triodos 51 outstanding sustainable practices, we strive to ensure a healthy CONTENTS ›› ABN AMRO developed a scorecard to identify the environmental in outperforming parties compared to their peers in each sector, like 1 COP FINC natural resources, utilities, automotive etc. We do not want to risk ›› Achmea missing out on these opportunities. transport, waste management, water management and energy 2 NATURAL CAPITAL realised ›› ACTIAM companies are more adaptive in tackling societal issues, but are With we invest in listed companies, assets, company and state obligations and in 3 MATERIALITY investment funds. Impact investments are incorporated in our ›› ASN Bank 4 MEASURE “ Sustainable business is better ›› De Friesland 5 CLIMATE business, so we want to ›› FMO mainstream sustainability” 6 WATER ›› ING 7 LAND ›› SNS Bank water will become increasingly important, which is described in our report ‘Too 8 COLLABORATION . Water stress (too little) and flood risk (too ›› SPF Beheer agriculture and responsible water usage by corporations will be 9 TRUE RISK Jochen Harkema, Sustainable Investment ›› StartGreen Advisor, Gerben Hieminga, Economist, ING 10 ONE PLANET economic risk and published clarifying country infographics to ›› Triodos 52
CONTENTS
›› ABN AMRO 1 COP FINC
›› Achmea 2 NATURAL CAPITAL
›› ACTIAM 3 MATERIALITY
›› ASN Bank 4 MEASURE
›› De Friesland 5 CLIMATE 7 LAND USE AND DEGRADATION ›› FMO 6 WATER
›› ING 7 LAND
›› SNS Bank 8 COLLABORATION
›› SPF Beheer “Saving ecosystems is not only affordable, but pro!table. 9 TRUE RISK Nature must not be turned into a commodity, but rather into ›› StartGreen 10 ONE PLANET an asset treasured by the mainstream investment market” ›› Triodos Tidjane Thiam, Credit Suisse Chief Executive Of!cer 53
CONTENTS
LAND ›› ABN AMRO 1 COP FINC
›› Achmea Land use and land degradation have a (potentially) big impact on biodiversity by companies worldwide, found that only a very 2 NATURAL CAPITAL the loss of biodiversity. Recent studies industrial agriculture is a bigger threat for biodiversity than determine a comprehensive approach to protect biodiversity and ›› ACTIAM climate change. The 3 MATERIALITY working on deforestation, agricultural value chains and land degradation as import strategies in the transition to sustainable ›› ASN Bank land use. PRé Consultants, to develop a biodiversity footprint methodology 4 MEASURE [weblink volgt]. The basis for this is the Life Cycle Assessment annual conference (LCA) based methodology ReCiPe, combined with an impact ›› De Friesland deforestation as a result of the production of soy and palm oil, 5 CLIMATE pose risks for investors and that the issues surrounding it are many uncertainties and constraints, it provides insight in ›› FMO investors to better understand the current situation. At that time 6 WATER a new interactive online web platform from Rainforest Action and an indication of the area of land impacted by a certain and Profundo was launched as part of a campaign ›› ING targeting investors implicated in tropical deforestation in the Asia biodiversity. 7 LAND ›› SNS Bank investors can use developed by the WRI. If an 8 COLLABORATION investor knows the geographic production locations of the service have been discussed for some time now. Concepts such ›› SPF Beheer determine whether these companies are involved in wetland banking and ecotourism have been described by 9 TRUE RISK instrument for engagement with their investees. Similar to ›› StartGreen measuring impact on water, one of the barriers is the lack of 10 ONE PLANET disclosure by companies on the location of production sites. Sustainalytics ›› Triodos 54
CONTENTS market for impact investment in nature conservation is observed. Examples of interesting funds from a land ecosystem Between 2009 and 2013 USD 23.4 bn was invested in global perspective are: ›› ABN AMRO 1 C OP FINC and USD 1.9 bn by private investors, with an annual growth of Athelia Ecosphere fund. 26%. Two thirds of the investments were in sustainable food and This last fund makes use of UN instrument for the Reduction of ›› Achmea Deforestation and Degradation of forests known as REDD 2 NATURAL CAPITAL conservation projects. But it is, according to the study, an immature market with a shortage of investment prospects with Forest Effect Fund works towards protecting against ›› ACTIAM deforestation by investing in sustainable food production and 3 MATERIALITY metrics. A report by Credit Suisse and others Conservation thus enhancing forest conservation and increased harvests. Finance; from niche to mainstream calls for the development of ›› ASN Bank Annona of SPF Beheer, the African Agriculture Fund and Trade Investment Fund (AATIF) Root 4 MEASURE approach and an established cooperative business approach. Capital or the Livelyhoods Fund for Family Farming focus mainly on sustainable agriculture. ›› De Friesland From an ecosystem perspective the investment market should 5 CLIMATE take a landscape approach when investing in land ecosystems. Coalition for Private Investment in Conservation (CPIC) A study undertaken by Enclude found that out of some 80 ›› FMO investment opportunities at scale, only a handful have a strong academic sector like Credit Suisse, The Nature Conservancy, 6 WATER element of a landscape approach, i.e. an approach where IUCN and Cornell University to create investment opportunities and tools to help bring conservation projects ›› ING through an integrated landscape management plan. Enclude sees to the market place. 7 LAND they are at the concept stage. green infrastructure and its concept is that all banks that have ›› SNS Bank mortgages in a certain part of a town or city or other spatial 8 COLLABORATION ›› SPF Beheer Commonland, Living Lands 9 TRUE RISK in South Africa, Initiative 20x20 in Middle America and the Africa Forest Landscape Restoration Initiative (AFR 100). ›› StartGreen 10 ONE PLANET
›› Triodos 55
CONTENTS The So a landscape approach is a new trend in the world of ›› ABN AMRO development through integrated landscape management. It ecosystems more visible. The province of Antwerp made 1 COP FINC landscape images for stakeholder management. In the social goals increasingly depends on understanding and is being developed. ›› Achmea accounting for the impact of land management decisions on 2 NATURAL CAPITAL ecosystem goods and services, and developing a more coordinated approach to natural resource management on a ›› ACTIAM 3 MATERIALITY special investment workshop instruments and regulations need to come in at different scales, ›› ASN Bank as well as providing support at different stages of landscape 4 MEASURE development and during different timeframes. ›› De Friesland 5 CLIMATE to be deployed for projects in the build environment as well. The amount of green roofs on buildings is increasing to make Landscape image by province of Antwerp ›› FMO cities more resilient for heavy rainfall and heat. In the 6 WATER on vegetated roofs are being developed to become a bed & breakfast for domestic insects and birds. In the Ecorestoration ›› ING the infrastructure sector such as railways, 7 LAND calculated An approach completely devoted to restore degraded areas is ›› SNS Bank Commonland 8 COLLABORATION in green infrastructure will have to collaborate on a certain scale. a catalysing role in implementing landscape management. Whether it is a living or an ecosystem made out of bricks and ›› SPF Beheer cement, the place determines who has to be involved. 9 TRUE RISK ›› StartGreen 10 ONE PLANET landscape restoration prospects. ›› Triodos 56
CONTENTS A policy brief Deep Learning ›› ABN AMRO maintenance costs, investment returns, cost recovery and risks, 1 COP FINC hamper scaling up. Different coordinating mechanisms limit agriculture, timber and paper and recreation. further investments. Coordinating mechanisms like linking ›› Achmea work on the scale of the ecosystem. 2 NATURAL CAPITAL towards a regional approach and the number of mechanisms for for deforestation is on the rise and some see degraded collaboration between public and private stakeholders at local ›› ACTIAM and global levels is increasing (PPPs and investment funds) as 3 MATERIALITY is being developed. ›› ASN Bank institution. 4 MEASURE ecosystems, because of a lack of reporting by companies on land use etc. ›› De Friesland 5 CLIMATE of funds have been developed on this scale. ›› FMO 6 WATER horizon ›› ING 7 LAND
›› SNS Bank 8 COLLABORATION
›› SPF Beheer 9 TRUE RISK
›› StartGreen 10 ONE PLANET
›› Triodos 57
CONTENTS
›› ABN AMRO ›› SNS Bank NV 1 COP FINC
›› Achmea 2 NATURAL CAPITAL
›› ACTIAM 3 MATERIALITY
›› ASN Bank 4 MEASURE
›› De Friesland 5 CLIMATE
›› FMO 6 WATER
›› ING 7 LAND
›› SNS Bank 8 COLLABORATION
›› SPF Beheer 9 TRUE RISK
›› StartGreen 10 ONE PLANET
›› Triodos Retail bank aiming for a low carbon economy
CONTENTS
Engage others in sustainable ambition ›› ABN AMRO 1 COP FINC ›› Achmea 2 NATURAL CAPITAL ›› ACTIAM 3 MATERIALITY ›› ASN Bank 4 MEASURE ›› De Friesland 5 CLIMATE ›› FMO Climate change affects us all and we believe that everyone 6 WATER ›› ING ambition and join the process and strategy to become climate 7 LAND
losses, mainly caused by the private ›› SNS Bank 8 COLLABORATION options and have started a number of pilots on insulating homes ›› SPF Beheer emissions of our 9 TRUE RISK Laura van Heeswijk, Project Leader ›› StartGreen CSR at SNS BANK N.V. 10 ONE PLANET
›› Triodos 59
CONTENTS ›› ABN AMRO 1 COP FINC responsibility of banks in relation to climate change. In the emissions of our mortgage portfolio. That will result in a better ›› Achmea reduce their impact on climate change. We also urge the understanding of the energy use of our portfolio and provide government to impose legislation on companies to report on valuable insights to develop and improve our sustainable 2 NATURAL CAPITAL emissions. The Climate Statement shows that banks ›› ACTIAM is also engaged in a partnership with Slimwoner.nl to stimulate emission reduction. Collaboration is necessary for environmental 3 MATERIALITY sustainability and banks can take a leading role in the transition ›› ASN Bank 4 MEASURE
›› De Friesland “ Cooperation and partnerships 5 CLIMATE
are essential in making the ›› FMO Dutch housing stock sustainable” 6 WATER ›› ING
7 LAND “We believe it is essential to engage others in combating climate ›› SNS Bank 8 COLLABORATION ›› SPF Beheer took the lead in setting up the Platform Carbon Accounting 9 TRUE RISK institutions, we are developing a methodology to measure ›› StartGreen the climate impact of our investment portfolios and develop 10 ONE PLANET ›› Triodos 60
CONTENTS
›› ABN AMRO 1 COP FINC
›› Achmea 2 NATURAL CAPITAL
›› ACTIAM 3 MATERIALITY
›› ASN Bank 4 MEASURE
›› De Friesland 5 CLIMATE 8 COLLABORATION ›› FMO 6 WATER FOR ECOSYSTEMS IN NEED ›› ING 7 LAND
›› SNS Bank 8 COLLABORATION
›› SPF Beheer 9 TRUE RISK “A prerequisite for ecological networks is well functioning ›› StartGreen social networks.” 10 ONE PLANET
Anthonie Stip, Dutch Butter"y Conservation ›› Triodos
CONTENTS COLLABORATION companies and projects they invest in or lend to. They organize ›› ABN AMRO special days and seminars for relations and feature them in their 1 COP FINC different media channels. They do the same for their clients. In this way they develop their investment strategy cooperating with ›› Achmea many different stakeholders. 2 NATURAL CAPITAL concept containing all the ecosystem services our economy needs. That the ecosystems generating these services have ›› ACTIAM different characteristics and that for resilience they depend on 3 MATERIALITY biodiversity. Moving forward they learned that three indicators approach with companies is the of ›› ASN Bank emissions, dependency and impact on water as well as analysing 4 MEASURE regular meetings take place on the structure and operations. ›› De Friesland the members discovered that a stable climate, fresh water and This calls for an increase in knowledge and training for the 5 CLIMATE fertile land are priceless ecosystem services for humans and investor and the investee. that all actors connected to an ecosystem have to work together ›› FMO to keep it resilient. Institutionalized forms of collaboration for sustainability are 6 WATER , and the ›› ING ecosystems are regional or local. When measuring the impact 7 LAND (voting and engagement). The PRI facilitates joint engagement screening, as well as collecting local knowledge to engage with initiatives, which investors can join as a lead investor or ›› SNS Bank investees on water impact data and water management. To keep supporting investor. It also facilitates collaboration on 8 COLLABORATION on the rise, but only a handful of funds have started. These funds resolution or create awareness of a shareholder resolution that is ›› SPF Beheer share the challenge that, once degraded land ecosystems take 9 TRUE RISK institutional investors grouped together to press for a transition mechanisms. towards renewable energy. A recent evaluation ›› StartGreen 10 ONE PLANET putting responsible investment (RI) on the agenda of investors ›› Triodos 62
CONTENTS share their own data in more open source ways, and collaborate ›› ABN AMRO 1 COP FINC Infrastructure Investment Coalition necessary to deliver insights into the local state of ecosystems. ›› Achmea agenda for responsible investing is made by the Sustainable 2 NATURAL CAPITAL Together stronger and faster ›› ACTIAM about ecosystems and their users and have been building 3 MATERIALITY ›› ASN Bank 4 MEASURE addition to climate, water and land. on how to speak about money for green organisations. ›› De Friesland 5 CLIMATE Also scientists in the world of ecosystem services have a lot of knowledge and data. They are working on maps and on ›› FMO describing the value of ecosystem services at many different 6 WATER ›› ING described in 7 LAND audience. Collaboration with global, regional and local policy ›› SNS Bank conference 8 COLLABORATION CoP FINC at the Polderdak, a rooftop water management system. ›› SPF Beheer speakers had a focus on public funding however there were no 9 TRUE RISK ›› StartGreen ecosystems and their services now and in the future. Cooperation 10 ONE PLANET helps gain insight about whether an investor has an impact and in at the CoP13 ›› Triodos 63
CONTENTS ecosystem services, but does not give guidance yet on the role ›› ABN AMRO they could or should take. 1 COP FINC or local level is needed. ›› Achmea standardization of tools and methods as is done in the Platform 2 NATURAL CAPITAL Many institutions indicate that there are not enough bankable ›› ACTIAM new partners due to the geographical orientation of an 3 MATERIALITY ecosystem. Who else has investments in the ecosystem on which invest in sustainable companies or projects, but when projects are small and high risk they need a lot of due diligence work, ›› ASN Bank 4 MEASURE Land as a ›› De Friesland farmers Local 5 CLIMATE peneurs people agreeing to report on the use of proceeds. Until now it is the issuer who decides to call its bond green and is thus intrinsically ›› FMO 6 WATER Investors an important role in enhancing the transition to a green economy, ONE as they can bundle a number of smaller projects into larger ›› ING packages. They can be backed by public institutions, making APPROACH 7 LAND ›› SNS Bank 8 COLLABORATION fast growing schools ›› SPF Beheer instrument Media 9 TRUE RISK ›› StartGreen emergence of a market for this new instrument, special Figure 10: Collaboration model for landscape restoration. 10 ONE PLANET conferences, magazines and structures have been developed. Source: Commonland ›› Triodos 64
CONTENTS launched two new to provide capital ›› ABN AMRO projects. We hope that they will take an ecosystem perspective 1 COP FINC Also see . scale ecorestoration projects like the coral restoration project of ›› Achmea 2 NATURAL CAPITAL issued Unilever issued might become a way to participate in larger projects as well. Climate ›› ACTIAM Initiative. 3 MATERIALITY capital is key. Data to know the relationship between investments and ecosystem services have to be developed in an open source ›› ASN Bank 4 MEASURE ›› De Friesland a watershed, or a landscape. It will lead to positive impact, 5 CLIMATE consisting of investments in sustainable agroforestry and ›› FMO ecosystem conservation. It was awarded with the Sustainable resilient or to restore them. Also a close connection with national, 6 WATER ›› ING 7 LAND As became apparent from an ecosystem perspective on land, investment opportunities in landscapes are being developed or ›› SNS Bank 8 COLLABORATION ›› SPF Beheer sustainable landscape by packaging investment opportunities by 9 TRUE RISK such as Commonland and many others that are based on a ›› StartGreen 10 ONE PLANET ›› Triodos 65
CONTENTS
›› ABN AMRO ›› SPF Beheer 1 COP FINC
›› Achmea 2 NATURAL CAPITAL
›› ACTIAM 3 MATERIALITY
›› ASN Bank 4 MEASURE
›› De Friesland 5 CLIMATE
›› FMO 6 WATER
›› ING 7 LAND
›› SNS Bank 8 COLLABORATION
›› SPF Beheer 9 TRUE RISK
›› StartGreen 10 ONE PLANET
›› Triodos Pension fund manager strengthening biodiversity with impact fund Annona
CONTENTS
Natural Capital in Strategic Portfolio and ›› ABN AMRO Impact Investing 1 COP FINC ›› Achmea 2 NATURAL CAPITAL ›› ACTIAM 3 MATERIALITY ›› ASN Bank 4 MEASURE ›› De Friesland 5 CLIMATE ›› FMO dictate to our pensionfunds and their clients what they should 6 WATER participate in a particular pension fund, so it is our job to invest ›› ING 7 LAND ›› SNS Bank 8 COLLABORATION included as an integral part of the investment decision. The focus ›› SPF Beheer Nadja Franssen, Portfolio Manager is on human rights, child labour, the environment and, for one of 9 TRUE RISK Socially Responsible Investing, ›› StartGreen SPF Beheer 10 ONE PLANET ›› Triodos 67
Sustainalytics and then, based on our internal models, we write CONTENTS Annona gave a presentation ›› ABN AMRO as the Carbon Disclosure Project information and the annual in one of the CoP meetings, I noticed that implicitly we were report of the company. After the selection, we continuously 1 COP FINC monitor the companies. The information is used for dialogue ›› Achmea Africa. Still as a topic for investment choices, biodiversity is 2 NATURAL CAPITAL ›› ACTIAM “ Collaboration is needed to currently a hot topic. Apart from the fact that we always took the carbon emissions of a company into account when selecting 3 MATERIALITY progress on biodiversity investments, we have recently also measured the footprint of ›› ASN Bank our SAP portfolio. It turns out that our efforts bore fruit and our !nancing.” 4 MEASURE In addition, water is increasingly important as a topic. ›› De Friesland In the area of biodiversity we would like to see more innovation “The assumption that underlies SAP, is that unsustainable through impact investing. The obstacle is that most projects are 5 CLIMATE small scale and that the monitoring of lots of small projects is ›› FMO returns. The methodology is innovative and the results so far have been so positive that SAP repeatedly made the news in the integrates and bundles several projects, risks are spread and 6 WATER more investors would then have the possibility to take these ›› ING 7 LAND ›› SNS Bank change and pollution. As an investor we are continuously 8 COLLABORATION ›› SPF Beheer we also look at the opportunities to allocate a substantial amount of money into a fund. Unfortunately, many interesting and 9 TRUE RISK innovative ideas and developments I heard during the meetings on ›› StartGreen 10 ONE PLANET ›› Triodos 68
CONTENTS
›› ABN AMRO 1 COP FINC
›› Achmea 2 NATURAL CAPITAL
›› ACTIAM 3 MATERIALITY
›› ASN Bank 4 MEASURE
›› De Friesland 5 CLIMATE 9 TRUE RISK ›› FMO 6 WATER
›› ING 7 LAND
›› SNS Bank 8 COLLABORATION
›› SPF Beheer 9 TRUE RISK
›› StartGreen “What would nature do?” 10 ONE PLANET
Katherine Collins, Honeybee Capital ›› Triodos
CONTENTS The planetary boundaries show that the provision of an TRUE RISK ecosystem service can collapse over time. When this will happen ›› ABN AMRO 1 COP FINC ecosystems this moment is better studied than for others. Most work on how much monetary value related to natural capital is at ›› Achmea The Stockholm Resilience Institute developed the Planetary 2 NATURAL CAPITAL space for humanity. It shows the urgency of the matter with companies are going down so rapidly that media like Carbon ›› ACTIAM biodiversity being one of the most crossed boundaries. Tracker talk about a meltdown. Research by the intelligence Unit 3 MATERIALITY The cost of inaction that the value at risk to manageable assets from climate change is calculated as ›› ASN Bank 4 MEASURE ›› De Friesland future assets will come not merely through direct, physical harm, 5 CLIMATE but also from weaker growth and lower asset returns. The interconnected nature of the problem will reduce returns, even on ›› FMO investments unharmed by physical damage. Although direct 6 WATER damage will be more localised, indirect impacts will affect the entire global economy. Accordingly, asset managers will face ›› ING 7 LAND ›› SNS Bank 8 COLLABORATION study on the ›› SPF Beheer 9 TRUE RISK emissions have recently Figure 11: Planetary boundaries. Source: Stockholm Resilience Centre, 2009 risen again, after several years of decline. The Dutch economy is ›› StartGreen 10 ONE PLANET
›› Triodos 70
CONTENTS Dutch economy may be affected by relatively strong climate climate, water and land, for investments by risk areas in country ›› ABN AMRO and sectors. The second step is a risk analysis for individual 1 COP FINC by a risk analysis at the local level and identifying mitigating ›› Achmea reputational risks when investees are causing deforestation. actions. In a meeting 2 NATURAL CAPITAL one of the main insights was that companies and other investees regard to too much or too little water. Also the term ‘stranded need to report on water dependency and their impact on land and ›› ACTIAM 3 MATERIALITY organisations should cooperate more on putting pressure on ›› ASN Bank and for water use and land related ecosystem companies on reporting and disclosure. 4 MEASURE services. It can even become a legal risk with companies potentially being held liable for natural capital degradation. ›› De Friesland 5 CLIMATE ecosystem thinking should be the guiding principle. How long ›› FMO 6 WATER sector uses backward looking risk models. In the spirit of TruCost ›› ING temperature rise will make the ecosystem unstable and 7 LAND data of companies and True Price which calculates the prices consumers should pay for a product if natural and social capital given by science and commitment by governments Carbon ›› SNS Bank Tracker now frames the risks related to investments in fossil fuel 8 COLLABORATION ›› SPF Beheer The Dutch advises two steps for a 9 TRUE RISK future looking approach to determine true risks. Step one is a risk analysis with horizon scanning and looks for drivers behind the ›› StartGreen trends. This should be followed by a sectorial risk analysis and 10 ONE PLANET the determination of the impact on investees. The result of the ›› Triodos 71
CONTENTS Investing in nature and the restoration of degraded land has Considering true risk, we conclude that ecosystem services have Commonland has learned that its tipping points and some are at risk. Restoring ecosystems can ›› ABN AMRO 1 COP FINC backward looking. It needs to adjust, evolve and integrate true diverse funding model with a variety of partners such as family risk. This calls for science based scenarios for ecosystems and ›› Achmea 2 NATURAL CAPITAL guarantee for private investments in ecorestoration and thus help to build trustworthy scenarios. ›› ACTIAM Credit Suisse 3 MATERIALITY ›› ASN Bank 4 MEASURE ›› De Friesland calls the tragedy of the horizon 5 CLIMATE ›› FMO 6 WATER ›› ING 7 LAND ›› SNS Bank 8 COLLABORATION these assessments in the general (credit) risk framework and thus translate these assessments into a risk appetite at the ›› SPF Beheer 9 TRUE RISK land degradation, deforestation etc. and organize a series of master classes and workshops. ›› StartGreen 10 ONE PLANET
›› Triodos 72
CONTENTS
›› ABN AMRO ›› StartGreen 1 COP FINC
›› Achmea 2 NATURAL CAPITAL
›› ACTIAM 3 MATERIALITY
›› ASN Bank 4 MEASURE
›› De Friesland 5 CLIMATE
›› FMO 6 WATER
›› ING 7 LAND
›› SNS Bank 8 COLLABORATION
›› SPF Beheer 9 TRUE RISK
›› StartGreen 10 ONE PLANET
›› Triodos Innovative !nance for coral reef ecorestoration by the crowd
CONTENTS
Financing Natural Capital ›› ABN AMRO 1 COP FINC ›› Achmea 2 NATURAL CAPITAL ›› ACTIAM 3 MATERIALITY ›› ASN Bank 4 MEASURE ›› De Friesland 5 CLIMATE ›› FMO 6 WATER ›› ING 7 LAND ›› SNS Bank 8 COLLABORATION
“We can be a hands-on partner ›› SPF Beheer for regular !nancial institutions 9 TRUE RISK Coenraad de Vries, Managing Partner, ›› StartGreen Capital and enhance their natural capital StartGreen 10 ONE PLANET transition.” ›› Triodos 74
CONTENTS and sustainable projects. It is developing very rapidly worldwide, ›› ABN AMRO doubling each year (Massolution 1 COP FINC ›› Achmea 2 NATURAL CAPITAL ›› ACTIAM 3 MATERIALITY interest rates are incredibly low there are limited opportunities to ›› ASN Bank create returns for these savings. These two macro trends give 4 MEASURE ›› De Friesland 5 CLIMATE
›› FMO 6 WATER
venture capital venture capital ›› ING 7 LAND
informal informal ›› SNS Bank investors investors 8 COLLABORATION funding funding
friends, friends, ›› SPF Beheer family, fools family, fools 9 TRUE RISK
prepare start growth consolidation prepare start growth consolidation ›› StartGreen
StartGreen 10 ONE PLANET ›› Triodos 75
CONTENTS ›› ABN AMRO sustainable energy. This funding is of course also related to the 1 COP FINC ›› Achmea CoP, we started to think about the meaning of the concept of 2 NATURAL CAPITAL ›› ACTIAM natural capital related projects than we thought. Think of organic 3 MATERIALITY flower bulbs, protection of natural parks, initiatives to create a ›› ASN Bank healthy sea more biodiversity through crowdfunding because of the 4 MEASURE sustainable relevance and the public awareness. The network of ›› De Friesland network in this area. What we see is that much of the nature 5 CLIMATE ›› FMO we should come up with better business cases for natural capital. We could play a role by raising awareness and by direct 6 WATER ›› ING 7 LAND
›› SNS Bank 8 COLLABORATION
›› SPF Beheer 9 TRUE RISK
›› StartGreen 10 ONE PLANET
›› Triodos 76
CONTENTS
›› ABN AMRO 1 COP FINC
›› Achmea 2 NATURAL CAPITAL
›› ACTIAM 3 MATERIALITY
›› ASN Bank 4 MEASURE
›› De Friesland 5 CLIMATE 10 FINANCE FOR ONE PLANET ›› FMO 6 WATER
›› ING 7 LAND
›› SNS Bank 8 COLLABORATION
›› SPF Beheer 9 TRUE RISK “We have to move from the tragedy of the commons ›› StartGreen to the promise of the commons” 10 ONE PLANET
Willem Ferwerda, Commonland, No 1 of the Dutch sustainable 100 (2016) ›› Triodos 77
CONTENTS
FOR ONE PLANET ›› ABN AMRO Thinking 1 COP FINC chapter 9) representing a new way for ›› Achmea companies to look at their business and align it with what is 2 NATURAL CAPITAL economy, i.e. an economy that keeps the ecosystems on our ›› ACTIAM development and companies that get involved now will have the 3 MATERIALITY ›› ASN Bank 4 MEASURE impact indicator for biodiversity and a growing group is using the ›› De Friesland 5 CLIMATE a steep increase in what they call Sustainable Development Investments. As became clear in , more than half of ›› FMO Loss investing or do they have to go further and become 6 WATER approach will be part of such investments. In ›› ING 7 LAND be found. ›› SNS Bank 8 COLLABORATION To make a green economy the new normal, the transition in ›› SPF Beheer 9 TRUE RISK phase 3, called the critical mass phase characterised by inclusive and structural change (chapter one). Where competition between ›› StartGreen ) Looking back at Earth on 24 December 1968 by Bill Andes. 10 ONE PLANET Astronauts experience this as the ‘Overview effect’. ›› Triodos 78
CONTENTS collaboration is needed on data sharing, with new partners like ›› ABN AMRO 1 COP FINC determined by the geographical location of the underling different topics, are being created. Also the sector is ready to ›› Achmea work more closely with the central government. 2 NATURAL CAPITAL disclosure of data on production locations to gather the necessary water and land indicators. Collaboration is also needed The third phase of transition is also characterized by the rapid ›› ACTIAM growth of new infrastructure. In the last two years we have seen 3 MATERIALITY oriented and should take the time scale of nature into account. Sustainalytics, and of new sustainable services such as ›› ASN Bank Morningstar, with again Sustainalytics, who developed a 4 MEASURE In phase 3 governments institutionalize the transformation and sustainability rating for funds. It is a new way for investors to ›› De Friesland 5 CLIMATE Transition Law methods on natural capital are valuable was illustrated by the targets around reducing greenhouse gas emissions and overall Trucost. ›› FMO 6 WATER We think, based on the lessons and insights in this publication, ›› ING the transition to phase 3 is visible in the actions of the Dutch that the time has come to 7 LAND ›› SNS Bank and we would like to invite all 8 COLLABORATION organised by the Dutch ›› SPF Beheer community. This will lead to 9 TRUE RISK a paradigm shift, i.e. a profound change in a Do you see a duck or a ›› StartGreen sustainable future and that ecological risks threaten the fundamental model, believes hare? Once you see both you can’t go back to seeing 10 ONE PLANET and methods. only one of them. ›› Triodos 79
CONTENTS ›› ABN AMRO Regulation 1 COP FINC perspective, and its need to sustain on delivering ecosystem ›› Achmea turn around. 2 NATURAL CAPITAL RESILIENT This urgency for a radically different way of operating is summed Ecosystems ›› ACTIAM RESTORATION landscaping SERVICES 3 MATERIALITY conservation Stable climate (Aaron Mair sustainable Clean water production ›› ASN Bank 4 MEASURE to set science based targets. It may even be developed into a RESTORATIVE ›› De Friesland benchmark itself against the needs of the largest ecosystem of INVESTEES 5 CLIMATE the planet instead of each other. IMPACT INVESTEES ›› FMO 6 WATER with regard to natural capital or even ecorestorative like Interface, INVESTING RISK & RETURN will have to invest in ecorestoration. This has to be done with a loans ›› ING credit risk crowdfunding shareholder 7 LAND value ›› SNS Bank instrument for ecorestoration. More people are calling for FINANCIAL 8 COLLABORATION INSTITUTIONS ›› SPF Beheer friendly, for new technologies are a way to promote sustainable 9 TRUE RISK
Figure 13: Finance for one planet starting from ecosystems ›› StartGreen perspective. Based on CoP Business and Biodiversity, 2015 10 ONE PLANET
›› Triodos 80
CONTENTS open source clearing house, connected to the new ›› ABN AMRO and natural capital protocol. Data to make the risks associated 1 COP FINC with ecosystem services known and based on trustworthy video ›› Achmea 2 NATURAL CAPITAL needs global governance structures. It is global structures like The reaching out to the practice to evolve to a system that supports and sustains the ›› ACTIAM 3 MATERIALITY ›› ASN Bank Paris 4 MEASURE Agreement ›› De Friesland 5 CLIMATE Momentum to Transformation ›› FMO 6 WATER ›› ING We would like to replace the term economy with the needs of 7 LAND ecosystems providing the economy with its services. To take an ›› SNS Bank system players such as regulators and (international, local and 8 COLLABORATION regional) governments. ›› SPF Beheer 9 TRUE RISK recently has initiated the ›› StartGreen 10 ONE PLANET underlines the need for an increased effort to halt biodiversity ›› Triodos 81
CONTENTS
›› ABN AMRO ›› Triodos 1 COP FINC
›› Achmea 2 NATURAL CAPITAL
›› ACTIAM 3 MATERIALITY
›› ASN Bank 4 MEASURE
›› De Friesland 5 CLIMATE
›› FMO 6 WATER
›› ING 7 LAND
›› SNS Bank 8 COLLABORATION
›› SPF Beheer 9 TRUE RISK
›› StartGreen 10 ONE PLANET
›› Triodos Sustainable bank enhancing nature for pollinators
Photo: Ted van den Bergh
CONTENTS
Pollinating Finance ›› ABN AMRO 1 COP FINC ›› Achmea 2 NATURAL CAPITAL ›› ACTIAM . 3 MATERIALITY ›› ASN Bank 4 MEASURE ›› De Friesland themes renewable energy, organic farming, nature and 5 CLIMATE sustainable building. The projects are mainly located in the ›› FMO 6 WATER ›› ING 7 LAND which aims to improve the economic position of farmers in ›› SNS Bank developing countries and to encourage sustainable agriculture as 8 COLLABORATION ›› SPF Beheer Els Ankum-Griffioen, Senior Manager 9 TRUE RISK Business Development & Investor Relations, Triodos Investment Management ›› StartGreen and part of our business principles. We respect the environment 10 ONE PLANET by doing all we can to create and encourage positive environmental impacts. ›› Triodos 83
CONTENTS ›› ABN AMRO acceptance of natural capital as an investment theme by professional investors. Conventional vehicles and structures, are way to sustainable, innovative projects and impactful social 1 COP FINC ›› Achmea positive impact on the environment, such as organic farmers or wind and solar parks. Investing in publicly listed companies is Within these areas we focus on the themes of organic farming 2 NATURAL CAPITAL ›› ACTIAM criteria (positive selection) is reinforced by encouraging these energy, arts and culture, education, integrative medicine, poverty companies to do more, through active engagement. We are alleviation, emancipation and solidarity with people in developing 3 MATERIALITY transparent about the outcome of our engagement activities, and countries, to name a few. ›› ASN Bank we are convinced that selecting a particular focus makes a 4 MEASURE “ More cooperation will take place, ›› De Friesland with other banks, business, 5 CLIMATE NGO’s, science and governments” ›› FMO 6 WATER
›› ING With our donations we raise social awareness around food and about the dangers of chemicals in the environment. 7 LAND ›› SNS Bank leaks into the soil and groundwater, and it takes years before it 8 COLLABORATION ›› SPF Beheer bee and butterfly sanctuary 9 TRUE RISK Ted van den Bergh, Director, ›› StartGreen Triodos Foundation 10 ONE PLANET ›› Triodos 84
During the CoP meeting a variety of guests came to inspire the CONTENTS Epilogue ›› ABN AMRO the group with reflections or other support. We would like to thank all speakers, hosts and participants that participated once or 1 COP FINC ›› Achmea 2 NATURAL CAPITAL sounding board. ›› ACTIAM
3 MATERIALITY ›› ASN Bank 4 MEASURE ›› De Friesland 5 CLIMATE ›› FMO connected evolving practices to build knowledge. In doing so it 6 WATER paved a road for ecosystems based investment strategies and coalitions. We would like to thank all participants for their openness ›› ING and trust, for it is the only way to make a CoP like this a success. 7 LAND We would also like to thank their organisations for the room they participants and this publication will continue to inspire and provided to learn from one another and to accelerate the learning ›› SNS Bank 8 COLLABORATION possible to publish this document. A special thank you for the (Netherlands Enterprise Agency) (AMBOR creatie) ›› SPF Beheer 9 TRUE RISK community continuously linking its activities to (international) ›› StartGreen 10 ONE PLANET ›› Triodos 85
CONTENTS SPEAKERS PARTICIPANTS, SPEAKERS ›› ABN AMRO Jan Hasselman, Geanne van Arkel (Interface) 1 C OP FINC AND SOUNDING BOARD Keimpe Wieringa (PBL) Bert van der Moolen (Gooisch Natuurreservaat) ›› Achmea 2 NATURAL CAPITAL Nathalie Brouwer-Snel (Annona) Participants Wilco van Heteren (Sustainalytics) ›› ACTIAM Pieter van de Beukering (IVM) 3 MATERIALITY Richard Kooloos, Gitte Wouters (ABN AMRO) Sharon Hesp, Lucas Simons (New Foresight) Menno van Lieshout, Liesbeth van der Kruit (Achmea) Marieke Kamphuis (Oneplanetcrowd) ›› ASN Bank Kristel Verhoef, Maxime Molenaar (ACTIAM) Katherine Collins (Honeybee Capital) Willem Ferwerda (Commonland) 4 MEASURE Jeroen Loots, Irene de Jong, Piet Sprengers, Martijn Huijnen (ASN Bank) Ron Bohlmeijer, Jan Kempers (Heineken) ›› De Friesland Tjisse Brookman (De Friesland Zorgverzekeraar) 5 CLIMATE Floris Lambrechtsen (Double Dividend) Mariya Soshinskaya, Beatrijs van Manen, Loucky Spit, David Theelen (ARCADIS) ›› FMO Arthur Leijgraaff (FMO) Mark Goedkoop (PRé Consult) Rikjan van Zalingen, Jochen Harkema, Armand Ferreira, 6 WATER Gerben Hieminga, Jessica de Boer (ING) Okko Rabeling (J. Safra Sarasin) ›› ING Hellen Goorse, Rutger Schuil (MN) Sounding Board Jeroen van Teijlingen, Annelies van Herwijnen (former 7 LAND NPM Capital) Jolande Sap (chair) Peter van der Werf, Kanchan Mishra (Robeco) ›› SNS Bank Anita de Horde, Laura van Heeswijk (SNS Bank NV) Marleen Janssen Groesbeek (Avance Hogeschool) 8 COLLABORATION Nadja Franssen (SPF Beheer) Antione Heideveld (Het Groene Brein) Coenraad de Vries, Anieka van Leeuwarden (StartGreen) Guisepppe van der Helm (former VBDO) ›› SPF Beheer Koen van Seijen (Toniic) Willem Lageweg (former CSR Netherlands) 9 TRUE RISK Monica Miltz (Green Deal Board) ›› StartGreen 10 ONE PLANET
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CONTENTS The Economics of Ecosystems &Biodiversity REFERENCES www.teebweb.org ›› ABN AMRO Sustainable Development Goals Knowledge Platform, 1 COP FINC The references below are a selection of the references per chapter. Convention on Biological Diversity ›› Achmea 2 NATURAL CAPITAL 1 The Dutch CoP FINC Corporate social resonsibility: legal and semi-legal UNEP Inquiry, The Financial System We Need frameworks supporting CSR: developments 2000-2010 and ›› ACTIAM Biodiversity, the Next Challenge for Financial Institutions? Case Studies 3 MATERIALITY Biodiversity and Business, Insights from the Community of Practice ›› ASN Bank United Nations Global Compact, 4 MEASURE Principles for Responsible Investment, PRI Association, Guide on Natural Capital and Financial Institutions, ›› De Friesland Natural Capital and Financial Institutions; Transitioning Wealth Accounting and the Valuation of Ecosystem Services 5 CLIMATE towards a Green Economy Ten Tips for Clever Change, Caroline van Leenders, ›› FMO 6 WATER Theory U: Leading from the Future as it Emerges, ›› ING 3 The materiality of natural capital 7 LAND 2 What is Natural Capital? Environmental, social and governance integration for banks: The path towards the Natural Capital A guide to starting implementation ›› SNS Bank Global Sustainable Investment Alliance 8 COLLABORATION protocol Natural Capital Declaration, www.naturalcapitaldeclaration.org Spotlight on the Market; The Impact Investor Survey, ›› SPF Beheer Ecosystem Services: from Concept to Practice 9 TRUE RISK Catalysing wealth for change Millennium Ecosystem Assessment, The Nature of Investing ›› StartGreen www.millenniumassessment.org 10 ONE PLANET
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CONTENTS 4 How to measure impact? 6 Water; too little, too much and too polluted Environmental P&L; Understand your impact, drive your Global Risks 2015 Report ›› ABN AMRO performance Too little, too much; the diverse sectoral challenges of water. 1 COP FINC Natural Capital Protocol World Resources Institute. (WRI) www.wri.org ›› Achmea Aqueduct; measuring and mapping water risk, WRI, 2 NATURAL CAPITAL A Biodiversity Benchmark; The impact of Dutch sectors and companies on biodiversity Water Footprint Network ›› ACTIAM Ceres, www.ceres.org 3 MATERIALITY ReCiPe . Integrating water stress into corporate bond credit analysis, G4 Sustainability Reporting Guidelines ›› ASN Bank 4 MEASURE How could sustainable trade contribute to the conservation 7 Land use and degradation of natural capital? Levering Ecosystems: A business-focused perspective on ›› De Friesland Trucost , www.trucost.com how debt supports investments in ecosystem services, 5 CLIMATE Natural Capital at Risk: The Top 100 Externalities of Business Global Canopy Programme, ›› FMO Forests & Finance 6 WATER 5 Climate change and carbon accounting 350.org, Rainforest Action Network www.ran.org ›› ING Carbon Tracker, www.carbontracker.org Global Forest Watch; explore data, World Resources 7 LAND Carbon Disclosure Project www.globalforestwatch.org Asset Owners Disclosure Project, Biodiversity in the Spotlight ›› SNS Bank The Montréal Carbon Pledge Commonland, 8 COLLABORATION Intergovernmental Panel on Climate Living Lands, Change (IPCC), www.ipcc.ch The Little Sustainable Landscape Book ›› SPF Beheer ., 9 TRUE RISK Outcome Statement- Global Landscapes Forum: The Adapting portfolios to climate change Investment Case 2016 ›› StartGreen Atlas Natural Capital 10 ONE PLANET Platform Carbon Accounting Financials Scaling up investments in Ecosystem Restoration Dutch carbon pledge ›› Triodos 88
CONTENTS 8 Collaboration for ecosystems in need 10 Finance for one planet UNEP FI, One Planet Thinking, www.oneplanetthinking.com ›› ABN AMRO From principles to performance Banking for a Better World 1 COP FINC Green Infrastructure Investment Coalition , www.giicoalition.org ›› Achmea Masterclass Green Business Modelling UNEP Inquiry, 2 NATURAL CAPITAL EEB Conference, actions for nature transformation ›› ACTIAM Sustainable Finance Lab 3 MATERIALITY Green Bonds Responsible investor. GRI Standards Download Center ›› ASN Bank An Introduction to Green Bonds, Impact Investing Committe, The New Climate Economy 4 MEASURE Climate Bonds Initiative, www.climatebonds.net Paris Agreement ›› De Friesland Sustainable products & services A mid-term review of the EU Biodiversity Strategy to 2020, 5 CLIMATE 9 True Risk Julia Roberts is Mother Nature, Conservation International, ›› FMO The Nine Planetary Boundaries, Stockholm Resilience 6 WATER The Cost of Inaction: Recognizing the value at risk from ›› ING climate change 7 LAND True Risk, a future looking approach for natural capital, CoP ›› SNS Bank Unburnable carbon 2013: Wasted capital and stranded 8 COLLABORATION assets Resolving the climate paradox ›› SPF Beheer 9 TRUE RISK
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CONTENTS
ABBREVIATIONS ›› ABN AMRO 1 COP FINC
›› Achmea PES 2 NATURAL CAPITAL CE PRI Principles for Responsible Investment CoP FINC ›› ACTIAM Degradation 3 MATERIALITY SFL ›› ASN Bank TEEB 4 MEASURE UNEP ES UNEP FI ›› De Friesland ESG Initiative 5 CLIMATE FI UN PRI GCP Dutch Association of Investors for Sustainable ›› FMO GHG Development 6 WATER GIIN GRI Services ›› ING IFC 7 LAND IPCC Intergovernmental Panel on Climate Change WWF IUCN WRI World Resources Institute ›› SNS Bank Life Cycle Assessment 8 COLLABORATION NCC please see the ›› SPF Beheer NCP 9 TRUE RISK NGO OPT see the ›› StartGreen PBL 10 ONE PLANET
›› Triodos 90 FINANCE FOR ONE PLANET CoP Financial Institutions and Natural Capital CONTENTS