Browsing by Author "Matula, Alina"

Among financial institutions, there is a growing concern about risks in their portfolios related to biodiversity, and its closely related affiliate, climate change. Investors are demanding greater transparency and biodiversity management in order to make informed investment decisions in listed equity and to act as responsible shareholders. The aim of this thesis is to explore, from the Nordic pension investor point of view, how the risk related to biodiversity loss is assessed and managed in the financial markets. Following qualitative approach, primary data was collected with 14 semi-structured in-depth interviews of two target groups: pension investors in the Nordic countries and ESG specialists which refers to specialists in sustainable finance or biodiversity related sustainability fields. The results were analyzed using template analysis. The results show that taking biodiversity into consideration in investment processes is constantly evolving and Nordic pension investors are paying close attention to the topic. Among drivers to incorporate biodiversity into investment decision-making, risk management was the most important. ESG specialists' experience of institutional investors' means to influence biodiversity loss mitigation differed from pension investors' perspective. Nordic pension investors are not fully aware of the existing methods for analyzing the risks and impacts of biodiversity loss in their own investment portfolio. However, they are highly motivated to find reliable ways to manage portfolio risks. Integrating biodiversity risks and impacts into the investment process can be challenging due to a lack of investment tools and best practices. Investors are preparing for increasing statutory and voluntary regulation. Both ESG specialists and Nordic pension investors see that lack of comparable, transparent, reliable data is an essential barrier when it comes to listed-equity investments and biodiversity loss mitigation. The data available lacks financial materiality and the impacts of biodiversity loss on the real-world return expectations, and return-risk-profiles are unknown. To solve problems regarding the lack of data in general and especially transparent and comparable data, companies are expected to disclose material nature-related dependencies and impacts, and report associated metrics and targets.