Placing nature at the heart of the transition

Phoebe Stone
close up image of ocean wave

At a glance

  • Technology, especially developments in AI, can play a significant role in environmental sustainability.
  • Recent developments in government policy are prioritising environmental and social change, including a shift towards integrating nature conservation. 
  • Accurate biodiversity data is crucial to assess a company’s impact and dependencies on nature. 

As humans, we occupy the world for the duration of our lifetime, but our mark is left many times longer than this. Over the last few years, countries across the world have started to galvanise some of the required financial resources, primarily through infrastructure spend, to a greener operating model. 

With sustainable issues increasingly in focus, in both the public and private sectors, we are pleased to announce the release of our annual Sustainability 360 Report. 

This year’s edition focuses on the central role of the natural world, delving into the potential of artificial intelligence and robust government policies to foster significant environmental and social transformations. As global communities face unprecedented challenges, we reflect on the strides made thus far and how innovation can help propel the green transition. 

Technology as a partner not a solution 

Relying on technological innovation alone is not the solution for further mitigating climate change. Estimates from the carbon capture and storage industry, for example, place its extraction ability at circa 5% of necessary carbon emissions. Meanwhile, the most effective carbon sinks – our oceans, forests, saltmarshes, soil and seaweed – need protecting and restoring. We should be utilising some of the best examples of human ingenuity and technology to do this. 

Across the world, communities are being increasingly impacted by weather events that have been proven to be exacerbated by climate change. More focus needs to be placed on adapting to climate change and investing in the technology that enables this. 

"We recognise the importance that both nature and biodiversity play in underpinning the vital ecosystem services that form the foundation of our economies."

Phoebe Stone Partner, Head of Intermediary Investment Services and Head of Sustainable Investing
Phoebe Stone

Government policy and structural change

Policy holds the power to offer crucial guidance, incentives and regulatory mechanisms necessary for steering the transition. It is crucial that this policy action to move towards a more sustainable world also places nature at its heart. Around the world, we are seeing more instances of this – from the Inflation Reduction Act in the US to the progress made at COP 28 in Dubai at the end of last year. 

We are also seeing the transition from traditional to clean energy. Commodities play a pivotal role in the energy transition. It is essential for us to understand supply chain risks, whilst ensuring the companies we are invested in leverage their influence to progressively steer extraction within the commodity market towards greater sustainability.

Sustainability considerations are increasingly becoming a corporate imperative. Companies and investors have woken up to the fact that biodiversity loss poses systemic risks. In the coming years, companies will need to start working towards science-based targets for how much they will contribute to restoring forests, soils and freshwater systems. It is critical that, as investors, we can identify biodiversity investment risk and opportunities to drive more informed and impactful engagement with our investment holdings. 

aerial view of ocean

Sustainability 360: 2024

Due to advances in modern technology, people frequently forget the important role of nature in restoring and regulating Earth’s chemical cycles, and how it can help to curb the effects of climate change. Learn more in our annual report.

From 2030, LGT’s global operational emissions and those stemming from our own investments will be compensated and reduced to net zero. Although the path to net zero is not easy, we can only achieve our ambitious goal if we regularly scrutinise our actions and constantly adapt our measures and know where we can make improvements. 

Read more from Insights.


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