CB: “So, Mike, we’ve just come out of COP16 with all its talk of nature finance, and how financial institutions have both an obligation and an ability to play a role in securing a nature-positive future. What are your thoughts on the matter?”
MH: “I can hardly say I’m surprised. First it was climate, and then more and more people stared to cotton on to the fact that they’re both fundamentally interlinked.”
CB: “Are you hopeful that the likes of banks and asset managers will play their role, and not just commit to rhetoric?”
MH: “Well I guess I have to be, really. We all do.”
CB: “And why is that?”
MH: “So we have the energy to carry on, I suppose. From an existential view, we - you know, as a species - have to be quietly optimistic that we will still be able to put food on the table, and from a financial perspective we have to, otherwise all the impacts of nature loss will eventually hit businesses, and with that our savings, pensions, and the like. We can’t rest on our laurels, mind.
CB: “No?”
MH: “Absolutely not, unless we all plan on running away to Mars with the billionaire boys’ club. No – we need to remain hopeful in order to keep going, but we also need to make sure we get the bloody job done.”
CB: “So in terms of, say, ‘practical hope’, for lack of a better phrase, where do you find this?
MH: “People, ironically. Yes, we’re responsible for the mess we’re in, but there are a lot of folks out there who are not only aware of this, but who are trying to do their bit to fix said mess.”
CB: “Such as?”
MH: “Well you have the conservationists of course, but there’s people in our sector, too. Take Nature Finance, they’re a not-for-profit working to help make finance greener (though that’s probably an egregious oversimplification), and they’ve recently launched d a tool to assess the impacts of portfolios on nature”.
CB: “So other than this particular tool being potentially useful, why does it give you hope? Is there more to it?”
MH: “Absolutely. It proves to me, as it should you, that there are people and organisations out there doing more than virtue signalling. There are companies, public bodies, charities, etc. that have, and continue to, recognise what investors and asset managers need to be more responsible, and they’re doing what they can to meet these needs.”
CB: “So as long as there are people trying to help, there is hope?”
MH: “Indeed. Or at least I reckon so.”
CB: “So we can all sleep a little more soundly tonight, then?”
MH: “I suppose. Provided we don’t get lazy.”
CB: “Do you think people will? Get lazy, that is.”
MH: “I think it’s increasing unlikely given the improvements we’re seeing in reporting requirements. In the past it might have been fine to just say, oh don’t know, ‘we’re committed to protecting biodiversity’, but in the future I don’t think that’s going to cut it.”
CB: “Why not?”
MH: “Because it’s useless. I can say I’m committed to running a marathon, but it doesn’t mean I’m going to do it. I think that given the sort of things we’re seeing by the likes of the TNFD, investors are going to start requiring companies to report to these standards, and really demonstrate their impacts, not to mention what they’re doing to address them. From a financial point-of-view, they’re going to want to make sure that their investments aren’t unacceptably risky, in addition to any more existential or moral reasoning.”
CB: “So beyond tools to assess impacts on nature, and improved reporting to help investors assess companies they are looking at investing in, what else do you think the future holds for nature finance? Is there anything else that gives you hope?”
MH: “Well we’re already seeing ways in which investments can be made directly into nature conservation projects and the like, so I can see that only growing in future. Things like nature bonds are being developed to try and bridge the gap between nature and finance, and I think they are very exciting. I love the idea of being able to buy a bond, and know that the proceeds will be used to do something like support farmers in the global south to adopt regenerative agricultural practices. Now I’m speaking as an adviser here, but I imagine lots of people would be happy to know that they’re pensions, for example, are not only supporting them and their families, but also supporting others miles and miles away (or maybe even closer to home?), while also making the world a greener place. Finance types can get a lot of flak in the press at times, but sometimes they can be bloody clever.”
CB: “So I suppose that leads back very nicely to the idea that people give you hope?”
MH: “Oh for sure. Our problems are fixable after all, and if we actually put our mind to it then we can fix them. There was what, 66 years between the Wright Brothers’ first flight and the Apollo moon landings? That just shows how ingenious we can be as a species, if we put our minds to it”.