EOS at Federated Hermes

Encouraging action to halt and reverse biodiversity loss

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  • What we know
  • What we’re doing
  • What it’s worth

What we know

EOS at Federated Hermes, the specialist stewardship services provider, is working to substantially reduce companies’ contribution to the five drivers of biodiversity loss, with climate change being a particular focus.

Its goal is to put biodiversity at the heart of its stewardship activities.

The EOS Engagement Plan is aligned to the UN Sustainable Development Goals, many of which are directly or indirectly linked to biodiversity.

EOS is now working to engage with companies on the central role that nature plays in their long-term success and to encourage them to take responsibility for actively contributing to its preservation and restoration.

With deforestation key for tackling climate change and biodiversity loss, one dimension of EOS at Federated Hermes’ climate change vote policy captures companies that are failing to address deforestation risks in their supply chains.

It has also published a white paper, Investor Expectations for Global Plastics Challenges, to encourage companies to reduce pollution and drive the transition to a more circular economy.

butterfly on green leaf

What we’re doing

EOS at Federated Hermes’ engagement approach for halting and reversing biodiversity loss is outlined in its white paper Our Commitment to Nature, which highlights the value of biodiversity and makes the business case for its protection and restoration.

While biodiversity and the ecosystem services it enables form the basis of our economies and societies, the paper says, they remain overlooked as key value-drivers and risks.

The paper also outlines EOS at Federated Hermes’ expectations of high biodiversity impact and dependency sectors, including consumer goods and retail, agrochemicals, mining and materials, oil and gas, utilities, real estate and construction, and finance.

EOS at Federated Hermes is now working to encourage companies to commit to having a net-positive impact on biodiversity throughout their operations and supply chains by 2030 at the latest, with interventions focused on the most material biodiversity risks, whether by geographical area, commodity, or process.

It has created a five-pillar engagement framework to highlight how each company’s net-positive goal should be accompanied by strong governance, effective measurement, an impactful strategy and regular disclosure.

Engaging on biodiversity-related public policy is another focus.

It responded to a consultation about the UK’s proposed legislation to curb illegal deforestation in supply chains, for example, and expressed views on the post-2020 Global Biodiversity Framework ahead of COP15 through a consultation for business and a workshop for the financial sector.

flock of birds flying in orange sky
jellyfish in the sea
polar bear illustration in pink

What it’s worth

Engagement on biodiversity and closely-related topics – climate change, the circular economy, sustainable food systems – is growing, becoming an increasingly central and regular discussion point in EOS at Federated Hermes’ engagements with companies.

As engagements on biodiversity are at a relatively early state, few case studies currently exist.

But the outcomes of EOS at Federated Hermes’ long-standing engagement on deforestation linked to palm oil, for instance with KLK and POSCO International, are publicly available.

Moving forward, EOS at Federated Hermes will continue to engage with companies on their role in protecting and restoring biodiversity, encouraging ambitious strategies and ensuring that they are effectively implemented.

It will also continue to collaborate with others in the financial sector, including as co-chairs of the Engagement Working Group and active participants in the Advocacy Working Group within the Finance for Biodiversity Pledge.

The financial sector has a critical role to play in tackling the nature and climate crises. Engagement with companies on biodiversity is especially important given the complexity of the topic. We are committed to working with peers, governments and companies to ensure that we collectively halt and reverse biodiversity loss by 2030.

Bruce Duguid Head of Stewardship