According to the WWF Living Planet Index, human activity has led to a 60% reduction in biodiversity over four decades. “This situation is not only having a significant impact on ecosystems and nature, but is also a major challenge for humanity,” warns Amanda O’Toole of AXA IM. “On a planet without biodiversity, life is impossible.”
The economic impact on biodiversity is becoming increasingly measurable. Therefore, regulators and consumers hold companies accountable.
Investments in registered shares can now be attributed directly to biodiversity. Investing in companies whose activities protect life on land, in water and in the air is an investment in biodiversity. A company’s products or services are particularly in demand for innovations and technologies that can mitigate the overall impact on biodiversity. It exists four key subsets that address the biggest global challenges facing biodiversity today and will be in the coming years: sustainable materials, land and animal conservation, aquatic ecosystems, and recycling and reduction.
Packaging, especially polymer packaging, is a major source of pollution for oceans and land. Given the massive use of plastic in everyday life, the development of sustainable materials such as biodegradable, biodegradable or sustainable solutions such as aluminum and glass offers a wide range of possible investments. The use and development of sustainable building materials (eg biocomposite concrete, rammed earth and wood) with low carbon content will reduce the environmental impact.
Agriculture and animal welfare are also changing industries. “Approximately 30% of biodiversity loss is due to intensive agriculture,” emphasizes Amanda O’Toole. “There are high-tech alternatives: Precision farming uses cameras, sensors and artificial intelligence to drastically reduce the use of pesticides and chemicals in the process.”
The third area of investment is related to aquatic ecosystems. Aquatic biodiversity is already a problem for communities whose livelihoods depend primarily on products from the ocean, rivers or other water sources. By limiting pollution through water treatment, companies can act to conserve aquatic life.
The last subset: recycling and reduction. As public opinion puts more pressure on companies, they will use resources more efficiently through recycling and the circular economy.
“The targeted actions are fully aligned with the four UN Sustainable Development Goals: clean water and sanitation, responsible consumption and production, life under water and life on land,” says Amanda O’Toole. The selection of stocks is based on AXA IM’s own knowledge of responsible investment. ESG factors are taken into account. “We have also signed a strategic partnership with Iceberg Data Lab, which has developed a biodiversity measurement tool.”
The main postulates of the strategy are active management, a focus on technology development and a belief in the possibility of impact investment to achieve financial returns and a real positive impact on biodiversity. “If you make informed choices, you have enormous opportunities to mitigate biodiversity loss,” concludes Amanda O’Toole.
Investing in the markets comes with the risk of losing capital.
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