During Climate Week NYC, Cathay Financial Holdings (Cathay FHC) demonstrated its commitment to sustainable practices and nature-positive growth. Sophia Cheng, the CIO of Cathay FHC, was a prominent voice at the World Biodiversity Summit, advocating for increased investment in biodiversity conservation and restoration. She emphasized the critical need for resources to support nature-positive initiatives, highlighting that the current annual allocation of USD 166 billion is far less than the estimated USD 996 billion required by 2030. Cheng urged for a larger investment in sustainable supply chains, impact investing, and ecosystem building to expand the biodiversity market.
Recognizing the growing awareness of nature-related risks, Cheng pointed out that 45% of the 416 organizations from 51 countries adopting the Taskforce on Nature-related Financial Disclosures (TNFD) are from Asia. She believes this demonstrates a rising appetite for nature-positive initiatives among Asian companies, particularly as global frameworks become clearer. To streamline investments in biodiversity projects, Cheng proposed the establishment of a global biodiversity project platform. This platform would connect diverse funding sources with nature projects across various risk profiles while setting consistent standards for market efficiency and stability.
Cheng also drew attention to successful initiatives like the World Bank’s ‘Rhino Bond’, which demonstrates the positive impact of linking bond yields to successful conservation efforts. This initiative has contributed to an 8% increase in the black rhino population, showcasing the dual benefits for biodiversity and investors. Throughout the discussions at Climate Week NYC, a strong sentiment emerged regarding the importance of tackling biodiversity loss. Panel members highlighted the promising outlook for biodiversity, emphasizing initiatives like the Global Biodiversity Framework, biodiversity credit schemes, AI technologies, and transnational collaborations. The overarching message revolved around the shared responsibility of both public and private sectors to collaboratively build a larger, more impactful market that integrates biodiversity.
Beyond the World Biodiversity Summit, Cheng participated in the Ceres Water Resources Forum, where she underscored the crucial role of water resources, quality, and stability for human life and global ecosystems. Cathay FHC, she revealed, analyzes companies within its investment and financing portfolios to assess their water resource risks. This includes integrating water governance performance in industries like semiconductors, power, and food into the company’s water resource investment management and engagement strategies.
Cheng commended Taiwan’s high-tech industries for their proactive responses to water-related risks and encouraged broader efforts in water governance, moving from targeted projects to more comprehensive strategies to avoid greenwashing risks. As the only Taiwanese financial institution to sign the ‘Valuing Water Finance Initiative’, Cathay FHC has demonstrably invested in and provided loans to the water resource sector, including water treatment, water supply, and wastewater management. Cathay Life Insurance, a subsidiary of Cathay FHC, joined Nature Action 100, collaborating with 190 international institutional investors in 2023 to engage 100 companies in industries like food, chemicals, forestry, and pharmaceuticals – sectors with significant impacts on natural habitats and biodiversity loss. These engagements aimed to encourage these companies to proactively protect and restore natural ecosystems.
Cathay FHC has also observed the emergence of nature-themed asset management and insurance products, alongside promising blended finance models that appropriately value ecosystem services. These developments are attracting greater investment in nature-positive initiatives. Cheng concluded by expressing her hope for continued collaboration between the public and private sectors to overcome financial barriers and achieve nature-positive goals. Her message underscored the collective responsibility of individuals and organizations to engage in efforts that promote sustainable practices and ultimately contribute to a healthier planet.
