Investments in biodiversity pay off

According to the WWF Living Planet Index, human activities have reduced biodiversity by 60% in four decades. “This situation not only has a significant impact on ecosystems and nature, but is also a major problem for humanity,” warns Amanda O’Toole of AXA IM. “Life on the planet is impossible without biodiversity.”

The economic impact on biodiversity is becoming increasingly measurable. Therefore, regulators and consumers hold companies accountable.

Innovation

Investments in listed shares can now be specifically addressed biodiversity. Investing in companies that protect life on land, in water and in the air is investing in biodiversity. Among the company’s products or services, innovations and technologies that can mitigate the overall impact on biodiversity are particularly in demand. It exists four key subgroups that address the biggest global challenges facing biodiversity today and in the coming years: clean materials, land and animal conservation, aquatic ecosystems, and recycling and reduction.

Packaging, especially polymers, is a major source of pollution in the oceans and on land. Given the widespread use of plastic in everyday life, the development of environmentally friendly materials such as biological, biodegradable or sustainable solutions such as aluminum and glass offers a wide range of possible investments. The use and development of environmentally friendly building materials (eg biocomposite concrete, compacted earth and wood), low in carbon, will reduce the impact on the environment.

Agriculture and animal protection are also changing industries. “About 30% of biodiversity loss is due to intensive agriculture,” said Amanda O’Toole. “There are high-tech alternatives: precision farming uses cameras, sensors and artificial intelligence, which can dramatically reduce the use of pesticides and chemicals in the process.”

The third area of ​​investment concerns aquatic ecosystems. Aquatic biodiversity is already a problem for communities whose livelihoods depend largely on ocean products, rivers or other water sources. By limiting pollution by purifying water, companies can act to preserve aquatic life.

Last subset: processing and reduction. As public opinion puts more pressure on companies, they will use resources more efficiently through recycling and the circular economy.

Strategy

“Targeted action is fully in line with the four goals of the UN’s sustainable development: clean water and sanitation, responsible consumption and production, underwater life and life on land,” said Amanda O’Toole. The selection of shares is based on AXA IM’s own knowledge of responsible investing. ESG factors are taken into account. “We have also signed a strategic partnership with the Iceberg Data Lab, which has developed a tool for measuring biodiversity.”

The main principles of the strategy are active management, focus on technology development and belief in the possibility of the impact of investment to achieve financial returns and real positive impact on biodiversity. “If you make informed choices, the potential for mitigating biodiversity loss is enormous,” concludes Amanda O’Toole.

WARNING

Investing in markets is associated with the risk of capital loss.

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