Large Nordic companies are overlooking biodiversity risks and opportunities, analysis by Danish pension company Danica Pension has found.

It warned that this lack of attention and understanding could affect whether these companies were attractive investments for pension investors.

Danica Pension’s analysis assessed Nordic companies on a scale from zero to four based on 19 criteria.

It found that Norwegian companies were at the forefront of accounting for biodiversity among the Nordic nations, with an average rating of 2.04.

Meanwhile, Danish companies came out worst in the analysis, with an average score of 1.6.

Swedish firms averaged a score of 1.8 and Finnish companies had an average rating of 1.76.

Of the 100 companies assessed, 84 saw biodiversity as a risk or business opportunity, but only 15 had an overview of how they depend on nature to conduct business or how they have a negative impact on it.

Three-quarters (75) of the companies surveyed said they had a desire to minimise their footprint on nature, but only 27 met the criteria to reach ‘level 3’, which meant that, for example, they had set concrete goals and plans to minimise the consumption of water or plastic, be deforestation-free, increase the proportion of circular materials or produce crops in a way that soil quality improves.

"Companies have challenges in working with aspects of nature and integrating risks and opportunities into their business models,” said Danica Pension and Danske Bank Asset Management head of climate and nature, Mads Steinmüller.

“It is not surprising that they are, by and large, not far within the nature agenda and have a potential for improvement, as it is a new and complex area where knowledge, solutions and tools are only being developed. But we generally find that companies want to raise their ambitions, which is also an unavoidable necessity.

"For example, companies in medicine, food, forestry, fishing or mining supply socially critical products to the economy. Therefore, it is necessary for companies that depend on nature to contribute to preserving and restoring it.

“It will help companies to future-proof their business, because if they don't, it could have consequences for society and our customers' pension investments.”

Steinmüller noted that, going forward, Danica Pension will use its analysis model in its active ownership of companies to assess their work in integrating nature into the business.

It uses principles from organisations such as the Taskforce on Nature-Related Financial Disclosures, Business for Nature, the Science-based Targets Initiative or the Transition Pathway Initiative, which Danica Pension said enabled it to evaluate the companies' biodiversity strategies on a scientific basis, set clear expectations for their handling of natural aspects, and monitor their progress over time.

"Ultimately, companies must document how their products and services depend on and affect nature throughout the value chain and make concrete goals and action plans for how and where they want to improve their footprint, and report on the development,” Steinmüller added.

“It should give us investors greater certainty about their impact, but also whether they can get hold of the natural resources they need for their products and can still be attractive investments.”

---