Over the last month, companies faced the world’s first shareholder resolutions over knowingly contributing to the demise of an endangered species. It is a sign that companies, including major grocers, can no longer ignore their role in halting and reversing nature loss.
Biodiversity or nature loss threatens the survival of one million species and has the potential to impact the lives of billions of people. More than half of the world’s GDP, equivalent to US $58 trillion, is moderately or highly dependent on nature. The World Economic Forum Global Risks Report 2024 identifies biodiversity and ecosystem collapse as the third most severe risk over the next ten years. In other words, it is in the interest of businesses, investors, people, – and nature – that companies urgently take action to address nature-risk within their supply chains.
The 2022 Kunming-Montreal Global Biodiversity Framework set ambitious targets for halting and reversing nature loss for governments and businesses. Target 15 calls for companies to “progressively reduce negative impacts on biodiversity”. Given only 5% of companies understand their impact on nature, much work remains to be done.
Thankfully a growing number of investors are taking nature-risk seriously. More than 230 institutional investors, representing more than $30 trillion in assets or advice, have formed Nature Action 100. The global collaboration has identified 100 companies from key sectors with a high potential of impact on nature. Their recently published benchmark found most companies are in the early stages of disclosing commitments to protect nature, but few have tangible assessments or plans. For example, some companies have signed on to the Taskforce on Nature-related Financial Disclosures (TFND), however, real action awaits.
Investor expectations for companies to disclose their nature-risk impact was recently tested with the first-of-its-kind shareholder resolution calling for major supermarkets, Woolworths Group and Coles Group, to report and disclose the impact their farmed seafood has on endangered species. Woolworths is ranked 23rd and Coles is 35th on the list of the world’s largest retail companies. Combined they control 65% of the Australian retailer market. Woolworths is on Nature Action 100’s target companies.
The voting results were historically significant. Nearly 40 per cent (39.11%) voted in favour against the Coles board’s recommendation. A large vote was also achieved with Woolworths (30.42%). Of the 550 plus shareholder resolutions put forward this year worldwide, the Coles vote was the:
- Largest in the world for a nature risk resolution this year
- 4th Largest in the world for a nature risk resolution ever
- Largest in Australia for any type of resolution since 2021
Importantly, the voting includes several international and national pension funds representing millions of members. This sends a strong message to the boards that nature-risk is a serious concern.
And it appears the supermarkets have taken note (though arguably not at the urgency required). So far, Coles has begun reducing their salmon sourcing from the area impacting the endangered Maugean skate; and Woolworths pledged greater transparency on their salmon sourcing.
The shareholder resolutions were put forward by the Save the Skate collaboration that includes SeaChoice member group Living Oceans Society, as well as SIX Invest, Environment Tasmania, Neighbours of Fish Farms, Eko, and several ethical funds.
While this historic resolution and vote targeted Australian supermarkets, consider this:
The companies just so happened to be major supermarkets with sustainable seafood policies. Despite their policies, their farmed salmon procurement is associated with an extinction event. And this very salmon is certified and labelled as “responsible”.
Sound familiar? The above scenario could easily, sadly, apply to Canadian grocers who rely on not-fit-for-purpose certifications as part of their sustainable seafood policy.
Canadian companies must take note of global expectations in regards to nature risk – because their companies bottom line – and our planet – are at stake.
(PS: The Canadian government also needs to act – tell your MP to support investments in nature protection and legislation)
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