11 May 2022 5 min read

Biodiversity: an intergovernmental COP out?

By Toby MacKean , Alexander Burr , Catherine Ogden

With governments struggling to gain traction on nature loss, corporates and financial institutions shoulder ever-greater responsibility to drive positive change.


Natural capital – the environmental wealth provided by nature – is indispensable to our economies. In some cases, this is obvious: food, water, building materials or medicines. But other linkages are less obvious, such as the intricate ecosystems responsible for nutrient cycles in fertile soils or the pollination of crops by insects. Biodiversity – the variability among living organisms and the very fabric of natural capital – keeps our ecosystems functional and makes our economies productive.

It is therefore no surprise that the loss of biodiversity presents a global systemic risk. The World Economic Forum estimates that more than 50% of the world’s gross domestic product (GDP) – around $44 trillion – is either moderately or highly dependent on nature.[1] The World Bank estimates that a partial ecosystem collapse could cost 2.3% of global GDP (or $2.7 trillion) per year.[2]

These are big numbers, but they fail to convey the immediacy of our potential vulnerability and the importance of biodiversity beyond our direct dependencies.

Climate change and nature loss are mutually reinforcing: a changing climate threatens natural ecosystems, and nature loss amplifies climate change by reducing the ability of ecosystems to store carbon. Passing critical thresholds will spark runaway change from one equilibrium to another.[3] The risks are larger and more imminent than we are currently prepared for; we need to address nature’s degradation without further delay.

So, what are we doing about it?

At a global level, public awareness is undoubtedly growing through initiatives such as the UN Biodiversity Day, scheduled for 22 May. However, progress is slow, following a decade of disappointment and lack of action. None of the Aichi targets set in 2010 by the UN Convention on Biological Diversity (CBD) were met by their 2020 target date.

COP15 to the rescue?

Well, not exactly. Despite its huge importance in establishing a global agreement on post-2020 targets, the conclusion of the UN Biodiversity Conference, COP15 (the nature equivalent of last year’s COP26), due to take place this month, has now been postponed for a fourth time. Newly proposed dates for October 2022 will defer the conference by more than two years after it was first scheduled, and there’s still uncertainty around this date.

It would, however, be unfair not to acknowledge that there has been some progress despite the significant global challenges of recent years.

In October 2021, at ‘part one’ (of two COP15 parts), there were encouraging national commitments to develop, adopt and implement a post-2020 global framework that would put biodiversity on a path to recovery by 2030. We have also seen a more conscious push in some markets to address biodiversity loss through policymaking (e.g. the EU’s SFDR, the UK’s Environment Bill, France’s Article 29) and corporate reporting frameworks (e.g. the IFRS ISSB and the Task Force for Nature-related Financial Disclosures or TNFD, which looks to support a shift in global financial flows from nature-negative towards nature-positive outcomes).

The second part of COP15, however, is where the real action lies. It is where governments will need to finalise these targets and formally adopt the post-2020 framework. It is where we will either get a deal and a clear direction forward or risk a complete collapse in momentum akin to the 2009 Copenhagen climate talks.

What can investors do?

Collectively, we need to be more active in protecting nature. Investors have a critical role to play in driving this forward.  

That is why – irrespective of intergovernmental progress – we have been engaging policymakers on the issue. This includes pushing for reform of the EU Common Agricultural Policy that is essential for not only climate mitigation and negative emissions but to support long-term environmental resilience in terms of climate adaptation, biodiversity improvements and food security.  

We are committed to working collaboratively across the finance sector, which is why in 2021 LGIM signed the Finance for Biodiversity Pledge, committing us to collaborate and share knowledge, engage with companies, assess impacts, set targets and report publicly.

We know there are significant challenges in how we tackle this complex issue effectively, which include insufficient reporting, data availability and a lack of internationally agreed metrics. Since publishing our Biodiversity Policy in November 2021, we have been engaging with the TNFD and are actively contributing to its beta-reporting framework consultation. As part of our deforestation commitment, we have taken further steps to assess our exposure to commodity-driven deforestation risk. This an important part of making progress towards climate and biodiversity goals, and we will be further accelerating our engagement on deforestation over the coming months. We are integrating biodiversity metrics into LGIM’s ESG tools, including the forthcoming update of the ESG Score and the ongoing evolution of the ESG View. We will be continuing to collaborate and share knowledge to further develop our expectations of companies’ approach to managing nature and biodiversity risks, impacts and opportunities.

A lot needs to be accomplished this year if we are to successfully address the nature crisis. Corporates and financial institutions must take the reins in the absence of intergovernmental urgency.  


[1] https://www.weforum.org/press/2020/01/half-of-world-s-gdp-moderately-or-highly-dependent-on-nature-says-new-report/

[2] https://www.worldbank.org/en/news/press-release/2021/07/01/protecting-nature-could-avert-global-economic-losses-of-usd2-7-trillion-per-year

[3] Nature is Next - Integrating nature-related risks into the Dutch Financial Sector (wwf.nl)


Toby MacKean

Global ESG Analyst

Toby is responsible for LGIM stewardship activities across a range of ESG topics with a specific focus on both climate and nature-related topics, whilst leading on the teams Natural Capital Management theme. He works closely with the Investment team to integrate Stewardship and ESG into investment processes. Toby joined LGIM in February 2022 from Ernst & Young (EY) where he was a Manager in their Climate Change and Sustainability Services team. Whilst there, he worked with a range of clients on various decarbonisation strategy, TCFD and climate target setting projects, provided non-financial assurance and corporate reporting services, as well as led the integration of climate risks into EY’s audit methodologies. Prior to that, he trained as an ICAEW (ACA) chartered accountant working in EY’s products and services department. Toby graduated from Durham University and holds a BSc (Hons) in Geography where his studies focused on climate change and environmental processes. 

Toby MacKean

Alexander Burr

ESG Policy Lead

Alexander joined in 2019 and leads LGIM's ESG policy engagement across markets. Prior to this, he helped establish an impact fund that uses blended finance to invest in emerging markets. Before that, Alexander negotiated blended finance investments at the European Bank for Reconstruction and Development (EBRD) to support sustainable economic growth across Eastern Europe, Central Asia, and North Africa. He has held roles advising governments on alternative finance and established a nuclear safeguards organisation. Alexander holds a BSc in Politics and International Relations from the University of Southampton, and further education at LSE, ICSA, CISL, and Birkbeck.

Alexander Burr

Catherine Ogden

Manager - Sustainability & Responsible Investment

Catherine joined LGIM in 2015 to help drive forward ESG integration into mainstream fund research and to strengthen sustainability engagements. Prior to this, Catherine spent four years working with governments in Africa and Asia on the sustainable policy, planning and management of the extractives sector, and five years in sell-side equity research. A keen linguist and sportsperson, she bemuses her colleagues with a love of Capoeira and British Military Fitness.

Catherine Ogden