LGIM’s newly released natural capital management policy articulates its nature stewardship approach, including its expectations for investee companies with regard to nature-related risks and opportunities, both from the standpoint of impacts to the company and the company’s impacts on nature.
Companies are expected to leverage best practice guidance such as the TNFD and its integrated due diligence assessment process and the emerging Science Based Targets Network to help meet the following expectations, which are closely aligned with the Nature Action 100 initiative:
· Assess – Evaluate location-specific interfaces with nature and priority impacts, dependencies, risks and opportunities across direct operations and value chains
· Set targets and ambitions – Based on detailed assessments, set time-bound, context-specific, science-based targets
· Strategic development - Develop and implement comprehensive strategies, policies and mitigation actions that address nature-related impacts, dependencies, risks and opportunities. The design and implementation of these strategies should prioritise rights-based approaches and be developed in collaboration with indigenous peoples and local communities when they are affected.
· Monitor and be accountable – Establish robust accountability and governance mechanisms, as well as develop internal nature and biodiversity expertise
· Engage - Engage with external parties, including actors throughout value chains, trade associations, policymakers and other stakeholders, to create an enabling environment for implementing plans and achieving targets, aligning with the Global Biodiversity Framework and helping to protect, manage and restore nature.
· Disclose - Report on progress and regularly evaluate performance, providing at a minimum the core metrics defined by the TNFD
Disclosure expectations are reportedly aligned with existing global reporting guidance, including the GRI and the ISSB.
LGIM will consider supporting nature-related shareholder proposals consistent with its voting policies and will continue to evolve its policies as company reporting matures and nature-related data becomes more reliable.