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Investors Need to be More Rigorous

2 April 2004

Corporate Responsibility News Service by the WWF European Forest Programme
Issue 2 (April)  2004

A report from the UK-based asset manager ISIS on extractive Industries, released in February, highlights that investors should require a rigorous approach to biodiversity management from all companies in this high-impact sector.

The ISIS report finds that although leading extractive companies have an understanding of the complex issues surrounding biodiversity and ecosystem management, there is a very wide gap between the best and the worst performers. “Biodiversity is an area of significant risk for extractive companies. In particular, there are risks relating to protected areas, liability and the mismanagement of biodiversity by others”.

The report concludes:

• While certain companies are well-equipped to understand these risks and start to manage them, others are apparently ignoring them.

• Industry bodies have played an important role to date; however, poor performance by a few companies could make the entire sector subject to public pressure or legislation.

• Even the best companies are at the start of the process of moving policy into performance, measurement and reporting.

• Investors should require a rigorous approach to biodiversity management from all companies in this high-impact sector.

The objective of the ISIS programme is to identify areas of biodiversity-related risk in the companies in which it invests, and to engage companies which do not appear to be managing the risks effectively, in order to protect the value of their shareholding.  ISIS currently manages around US$110 billion (as at 31-12-03) and invests in around 1,500 companies worldwide.

Source : ISIS Report Are extractive companies compatible with Biodiversity? Extractive Industries and Biodiversity: A Survey  February 2004

WWF European Forest Programme: Contact the editor on hb@wwf.at