Report on the first Climate and Biodiversity Meetings organised by La Financière de l'Echiquier
For this first edition of the Climate and Biodiversity Meetings, La Financière de l’Echiquier (LFDE) brought together experts, companies, and clients in order to mobilise its entire ecosystem, encourage the sharing of best practices, and identify concrete actions to combat climate change and preserve biodiversity.
These Meetings are part of the very ambitious Climate Strategy adopted by LFDE in May 2021. They allow us to bolster our commitment to our stakeholders, including businesses.
Because it is essential that investors work together with companies on these crucial issues, three workshops on the themes of the European Taxonomy, biodiversity, and the implementation of a climate strategy brought together 13 European companies and 10 clients with the LFDE management team of Echiquier Climate Imapct Europe[1] and the Responsible Investment Research team.
Led by European climate experts – CDP, Entreprise pour l’Environnement, I-Care – these workshops provided valuable initial lessons and identified engagement opportunities that will be taken over time.
On the European Taxonomy
- Investors and companies – ASML, DSM, SCA, Thermador Groupe, Albioma[2] – welcome this regulation. It is perceived as a neutral tool that offers a chance to add value to their positive-impact products and services and improve their communication on the subject.
- However, many things will make it difficult to implement: methodological differences, timing discrepancies between disclosures on the eligibility of investors and companies, and the fact that the system has not yet been fully published.
- Eligibility reporting, followed later by the alignment of companies and funds, is subject to competitive pressure that we hope will not bias the data disclosed.
Asset managers have an important role to play in helping companies learn about the Taxonomy’s regulatory framework. The educational value of their communications will be crucial, especially during the first few years that the regulation is in force.
On biodiversity
- The companies present at the conference – L’Oréal, Kering, Remy Cointreau and Voltalia – are already deploying a range of actions designed to analyse and minimise their direct impact as well as that of their supply chain, or to encourage their suppliers to implement sustainable, resource-efficient practices.
- The most mature companies on the subject are not always the most impactful ones, but rather those whose activity is highly dependent on biodiversity.
- Companies that have been dealing with this issue for a long time shared their practices and their thoughts.
- Biodiversity issues appear to be very local, specific to companies’ activities, and are difficult to take into account in aggregate reports and indicators.
- The subject is constantly evolving. The complexity for investors lies mainly in the lack of uniformity when it comes to data, organisations, methods, benchmarks and certifications.
- A common governanceimperative has emerged: biodiversity issues need to be taken into account at the highest level of the company (the Board of Directors) in order to better assess the risks and understand the dynamics.
On corporate climate strategy
- The workshop highlighted the importance of the appropriation of climate issues by the management of companies, whatever their size or sector of activity. This is a decisive issue in defining a coherent and ambitious strategy, including quantified, dated greenhouse gas emission reduction targets.
- Strategies are hard to deploy due to a lack of standardised data, expertise in impact measurement methodologies, and human and technical resources.
- The common challenge for all the companies – Aker Carbon Capture, SAP, Kemira, Vow ASA – is to integrate scope 3, i.e. the entire value chain, into their climate strategy. Difficulties include lack of visibility into supply chains, the ability of the company to influence supplier practices, and data quality.
- The most mature companies want to be able to include their avoided emissions in their disclosures.
An initial assessment of the commitments made will be delivered at the 2022 Climate & Biodiversity Meetings.
Bettina Ducat, CEO of La Financière de l’Echiquier, said:
This initiative unlike any other on the Paris market reflects our ambition to be a force for innovation in the areas of finance, climate change, and biodiversity. Asset management has a major role to play in directing capital to the most committed companies and in raising our clients’ awareness of these future issues.
Olivier de Berranger, Deputy CEO and CIO, added:
The first edition of our Climate & Biodiversity Meetings helped to clarify the issues facing companies and to enrich the dialogue between companies and investors. Our commitment to impact finance will continue to grow.