In connection with COP16, the Taskforce on Nature-related Financial Disclosures (TNFD) announced that more than 500 companies and financial institutions have committed to begin nature-related corporate reporting based on recommendations from the TNFD. That is a significant increase in the number of adopters and excellent news for the broader sector. From a regional perspective, Europe, Asia, and the Pacific continue to lead the way. At RS Metrics, we are glad to see this development of adoption, and we are proud to have been given the possibility to contribute to the TNFD with our expertise within the field of geospatial data and analysis of environmental climate risk on an asset level.
Environmental, climate, and biodiversity risks are all interconnected and have a direct financial impact in the short, mid, and long term. This impact is a natural part of any investment process that sensibly integrates all relevant and material risks.
In the past, investors asked for more and more data from issuers to address the ESG requirements that the asset owners were meeting from regulators, supervisors, and end-beneficiaries. I very much contributed to that request in some of my previous roles. However, today, the issue is not that data is limited. The data is available. But the problem is obtaining access to actionable information which can easily be integrated into different workflows and processes for investment purposes. Adhering to TNFD recommendations on nature will immensely support this development.
Considering the last years of evolution within the area of geospatial data, it is now possible for investors to effectively and efficiently integrate bottom-up asset-specific nature-related data into investment processes. This allows for asset-level assessment of dependencies and impact risks, giving investors the opportunity to engage with the issuer meaningfully and address the core issue relevant to the specific asset rather than trying to drill down to the core subject from the corporate level.
By analyzing specific location-based risks and impacts, investors can initiate informed discussions with company management about how they plan to address or mitigate these risks. For example, if an asset is in an area prone to climate risks like flooding, investors can use this data to engage with companies on their climate resilience strategies, urging them to implement adaptive measures or to strengthen infrastructure to protect long-term asset value. Additionally, geospatial insights on issues like local pollution, resource usage, or biodiversity impact can drive conversations and mitigations with precision and direct and actual effects. This proactive, data-driven engagement empowers investors to promote better risk management, align with sustainability goals, and ultimately encourage companies to enhance their resilience and accountability.
In the biodiversity space, asset-level geospatial data is a powerful tool for assessing and mitigating impacts on local ecosystems, enabling investors to make more responsible and biodiversity-conscious investment decisions. Through geospatial analysis, investors can identify whether assets are located in or near sensitive habitats, biodiversity hotspots, or protected areas. This insight is crucial for understanding potential impacts on local flora and fauna and evaluating how an asset’s activities might contribute to biodiversity loss, habitat fragmentation, or species endangerment. Investors investing in corporations with numerous locations of operation are, per definition, exposed to biodiversity risk that, today or tomorrow, can have a financial impact. That risk can and should be managed, and with geospatial data and analysis at the asset level it is now possible to achieve that.
Magnus has more than 20 years of experience from the international financial industry in different executive positions. He was previously the CEO of Nasdaq Nordics and most recently the CEO of Alecta. Alecta is one of the fifth largest pension funds in Europe. Magnus holds a LLM from Stockholm University, Sweden, and Executive Management from Stockholm School of Economics. He became President of RS Metrics Europe in October 2024.
