Schroders Assesses Nature-Linked Threats Across Its £779bn Portfolio

In a move that signals growing alignment between finance and biodiversity, asset management heavyweight Schroders has published its first-ever Group Nature Report, marking a formal alignment with the Taskforce on Nature-related Financial Disclosures (TNFD). The TNFD, for context, is a globally recognised framework designed to help companies identify, assess, and disclose nature-related risks and dependencies, an area of increasing scrutiny from investors and regulators alike.

Schroders’ 2024 report isn’t just a box-ticking exercise. It represents a significant evolution in how the firm evaluates environmental exposure, one that’s deeply embedded in its investment strategy. As of this year, Schroders has updated its corporate engagement expectations, now aligning them with both TNFD guidance and the Global Biodiversity Framework. This international agreement, endorsed by 196 nations, calls for ambitious targets: protect at least 30% of Earth’s land and oceans by 2030, slash pollution levels, and regulate the sustainable trade of wild species.

The report released on 2 June sheds light on the firm’s nature-related risks and dependencies across both public and private market holdings. It also showcases the use of NatCapEx, Schroders’ proprietary tool that evaluates nature-related externalities across 9,000 listed companies, enhancing its broader sustainable investment model.

What did the tool reveal? Land use, sea use, and freshwater disruption are the top drivers of nature-related impact. Meanwhile, carbon emissions emerged as the most pressing "impact pressure" cutting across portfolios. Unsurprisingly, the materials, utilities, and energy sectors are the chief contributors.

On the private investment side, Schroders’ infrastructure business, Greencoat, has been tracking biodiversity baselines across its UK solar energy portfolio. As of early 2024, 58% of Greencoat’s assets now include habitat management plans, a direct response to the UK’s Biodiversity Net Gain (BNG) mandate, which became legally binding this February.

Corporate operations weren’t spared scrutiny either. Schroders reported tangible reductions in its environmental footprint. At its London HQ, waste output is down 36% since 2019, and recycling has hit an impressive 92% in 2024. Over at the Horsham campus, biodiversity audits resulted in a 12.8% net gain, surpassing the UK’s 10% benchmark.

Schroders’ global head of sustainable investment, Andy Howard, said: “We are proud of the steps we have taken and recognise the challenge – and the tools we will need to navigate it – will only grow.”

Contextualising the stakes, Schroders cited World Bank data warning that even partial collapses in ecosystem services, such as pollination, fisheries, and timber, could erode global GDP by 2.3% annually. The flip side? Embracing nature-positive practices could unlock over $10 trillion in business opportunities each year.

Elsewhere, in a related development that underscores a broader shift toward eco-economic integration, Mitsubishi Electric has joined the G7 Alliance on Nature Positive Economies (G7ANPE). This coalition, formed at the G7 Sapporo Summit in April 2023, brings together businesses, governments, NGOs, academics, and international organisations to integrate biodiversity into economic planning and investment decisions. Mitsubishi Electric’s participation builds on its September 2024 pledge to align with the TNFD and support the Global Biodiversity Framework’s flagship “30by30” target.

What does that look like in practice? The company has been actively conserving green space across its manufacturing facilities in Japan. Several of these sites are now on track to receive designation as Nationally Certified Sustainably Managed Natural Sites by Japan’s Ministry of the Environment.

By joining the G7ANPE, Mitsubishi is positioned to tap into a global network of biodiversity actors, from policymakers to private enterprises, aimed at closing the $20 billion nature finance gap forecasted for 2025–2030 by the OECD.