Caisse des dépôts et Consignations (CDC): Nature is future

The PRI Awards 2024

Organisation:  Caisse des dépôts et Consignations (CDC)

Signatory type:  Asset owner

HQ country:  France

The approach, initiative, or process

Why we focus on biodiversity

In May 2019, the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES) published a global report confirming a rapid decline in biodiversity: over one million species are threatened with extinction. The preservation of biodiversity – which encompasses all living beings, their ecosystems and the interactions within species and with their environments – is crucial in combating other environmental challenges, such as climate change, desertification, water scarcity and various forms of pollution.

As a public organisation, we aspire to lead on biodiversity action, acknowledging its critical role in nature and the economy. In 2022, just before the 15th meeting of the Conference of the Parties to the UN Convention on Biological Diversity (COP15) in Montreal, we published a biodiversity policy to align biodiversity strategy and goals across all entities within Groupe Caisse des Dépôts. The policy was also in part a response to the regulatory agenda in France. For example, Article 29 of France’s Energy and Climate Law requires all French financial institutions – including investors – to disclose biodiversity-related risks as well as climate-related risks.

How we structured our biodiversity policy

Before shaping our approach to biodiversity, we enhanced our expertise by hiring an in- house specialist in natural issues and participating in collaborative initiatives, such as the Institut de la Finance Durable (formerly Finance for Tomorrow) nature working group and the Finance for Biodiversity Pledge. These partnerships were instrumental in developing a comprehensive biodiversity policy. Engagement with a range of international and national initiatives also informed our policy. These included The Taskforce on Nature-related Financial Disclosures, Entreprises engagées pour la Nature (which is a tool of the French Strategy on Biodiversity), as well as partnerships between some of our subsidiaries and various NGOs.

We undertook a structured internal process to develop our policy, focusing on capacity building and securing senior management buy-in. To facilitate this, we organised targeted meetings within our nature working group, which includes representatives from various entities across Groupe Caisse des Dépôts. During talks with each of our entities, we explored how to set and move forward on ambitious commitments. This was important as some entities had already developed actions to consider biodiversity in their investment processes, whereas others were at an earlier stage, only having the ambition to do so, and could accelerate their timelines through collaboration on the policy.

We structured the biodiversity policy around four areas (addressing the five IPBES drivers of biodiversity loss), as shown in the table below. We have used the biodiversity policy to develop and disclose our biodiversity strategy and to communicate our expectations and objectives on biodiversity with a wide range of stakeholders.

1. Footprint measurement

   • Commitment to quantifying and disclosing the biodiversity footprint of our operations: Development of the Global Biodiversity Score (GBS), which allows companies and financial institutions to measure their biodiversity footprint.
   • Engagement with stakeholders in footprint measurement.
   • Development of methods for accurate biodiversity footprint assessment.

2. Reduction of direct and indirect negative impacts

   • Aim to lessen environmental impact by addressing the five key pressures identified by IPBES, supported by detailed action plans across the group.

3. Increase of direct and indirect positive impacts

   • Strategies to boost both direct and indirect positive impacts effects through: Investment and financing decisions;
   • Promoting innovation and implementing schemes; Building influence and forging partnerships.

4. Contribution to research, training and awareness raising

Initiatives to:

• Advance relevant research;
• Train staff and other stakeholders;
• Elevate awareness of biodiversity issues.

We also ensure our biodiversity policy considers related regulation. For example, we sought alignment with the Corporate Sustainability Reporting Directive requirements, particularly European Sustainability Reporting Standard 4 (E4). E4, specific to biodiversity and ecosystems, will enable every company and financial institution to better explain how it is addressing biodiversity, and will require granular information on related short-, medium- and long-term goals. Currently, we are tailoring the policy to align with the Kunming- Montreal Global Biodiversity Framework (GBF), which calls for reorienting public and private financial flows.

Example – Taking action on our policy objectives and contributing to the Biodiversity Plan for Life on Earth or the Global Biodiversity Framework (GBF) signed in Montreal in 2022

The GBF is a historic global agreement, where nations agreed to address the unprecedented loss of biodiversity and to restore and protect natural ecosystems. The framework incorporates four overarching goals for 2050 as well as 23 global targets for 2030. To align the targets outlined in our policy with these goals, we have identified the targets within the GBF where we could have the largest impact. For example, Target 19 of the GBF seeks an increase in financing for the implementation of national biodiversity strategies and actions.

We recently set a target to direct €6 billion towards nature, focusing on biodiversity, water and the circular economy. While the allocation is still to be determined, we plan to invest in companies whose business models consider nature, and to finance projects aimed at restoring and protecting biodiversity at the local authority level, with a particular emphasis on nature-based solutions.

We also want to contribute to other targets such as target 7 which Is about reducing risks from pesticides. We exclude companies in which over 20% of turnover is generated by the manufacturing or sale of pesticides (herbicides, fungicides and insecticides for agricultural use) from their investments and financing.

Additionally, GBF Target 15 will require large, transnational companies and financial institutions to monitor, assess and disclose their risks, dependencies and impacts on biodiversity along their operations, supply and value chains and portfolios. We are dedicated to measuring and disclosing the biodiversity footprint of our financing and investment portfolios by the end of 2024, leveraging existing tools and developing new methodologies and tools where necessary.

The measures to ensure transparency and generate outcomes

We report each year on our nature-related commitments and actions. In our annual ESG report, we disclose our biodiversity footprint and our stewardship actions. We really believe that we can help companies to shift towards a new business model (which will reduce impacts on nature). We then maintain dialogue with companies and of course vote with conviction at company meetings.

We are also members of international initiatives for nature like Finance for Biodiversity Foundation and Nature Action 100 as we believe that the key of success is to act together.

 

PRI disclaimer: This case study aims to contribute to the debate around topical responsible investment issues. It should not be construed as advice, nor relied upon. It is written by a guest contributor. Authors write in their individual capacity – posts do not necessarily represent a PRI view. The inclusion of examples or case studies does not constitute an endorsement by PRI Association or PRI signatories.