This document outlines Ethos' expectations towards companies in terms of managing and minimising the impact of their activities on biodiversity. The paper will serve as a basis for the constructive yet demanding shareholder dialogue that Ethos and the members of the Ethos Engagement Pools Switzerland and International are conducting with companies on an issue which is as crucial as climate change today.
Seven out of nine. As announced at the end of September by a team of scientists from the Potsdam Institute for Climate Impact Research, a seventh planetary boundary has now been exceeded. Following climate change, land use and freshwater use, it is now the level of ocean acidification that has reached its critical threshold.
Nature, and more specifically biodiversity, is in danger. Along with climate change, this is the second major crisis facing humanity and all living beings today. Species are currently disappearing at a much faster rate than they can be replaced, prompting scientists to warn us that the sixth mass extinction, after the one that caused the disappearance of the dinosaurs 66 million years ago, has already begun.
This depletion of nature is the result of human activities, particularly the overconsumption of resources. It poses a critical threat to the well-being of future generations and could have serious consequences for human society, as it depends on nature for its economy, food security, health, and quality of life. However, the importance of biodiversity has been underestimated in recent decades, partly overshadowed by climate change, which is easier to measure. Yet the two phenomena are closely linked and tend to exacerbate each other.
In this rather gloomy context that Ethos is publishing an Engagement Paper on the theme of nature. This document will serve as a basis for members of the Ethos Engagement Pools (EEP) Switzerland and International when engaging in dialogue with companies on this topic, as is already the case for other ESG issues such as deforestation, digital responsibility and climate change.
Illustration of the principle of double materiality
In this well-researched, methodical document, which includes numerous scientific references, Ethos first looks at the causes of environmental degradation. These include agriculture, construction, resource extraction, energy production, industrial fishing, logging, and chemical and plastic pollution. Although companies depend heavily on nature to maintain their entire value chain, they are among the main culprits due to their activities.
The Engagement Paper therefore focuses on companies’ impact and dependencies on nature (e.g. access to water and raw materials, etc.), but also on the risks and opportunities that arise from this. The constantly evolving environmental crisis will profoundly transform markets, generating both risks and opportunities.
Companies that identify and take into account their dependencies and impacts on the natural world will be better placed to adapt and play a leading role in this transition. They can thus improve the efficiency of their supply chains, reduce the costs associated with access to scarce resources, and innovate through technological substitution.
General and specific expectations
Ethos has drawn up a list of seven general expectations for companies:
- Adopt clear and ambitious policies to significantly reduce their environmental footprint, particularly with regard to deforestation, plastic pollution and water management
- Adhere to and follow the TNFD LEAP approach
- Assess and monitor impact and dependencies
- Assess and monitor risks and opportunities
- Define a nature transition plan with ambitious science-based targets
- Report relevant and audited indicators according to the TNFD and further issue-specific frameworks
- Involve stakeholders and advocate for responsible regulation
In order to shed more light on the sectors facing significant risks related to nature degradation, Ethos has also set out specific expectations for several sectors such as agriculture, the chemical industry, and the pharmaceutical industry.
This Engagement Paper represents Ethos' initial guidelines to help companies assess their relationship with nature using the tools currently available to them and within the framework of existing regulations.
“Companies that proactively adopt ambitious transition strategies can mitigate their financial and operational vulnerabilities, while contributing to a sustainable and viable environment for society as a whole”, emphasises Vincent Kaufmann, CEO of Ethos. “Conversely, those that fail to address these challenges risk causing irreversible consequences, compromising economic and financial stability and social well-being, and consequently jeopardising the value of their shareholders' assets.”
At their annual meeting on 20 November in Bern, EEP members will be able to confirm biodiversity as a priority topic for shareholder dialogue in 2026. Ethos will then define specific engagement campaigns targeting companies that are particularly exposed in Switzerland and abroad.
Ethos Engagement Paper on Nature
