BNP AM

The official blog of BNP Paribas Asset Management

Biodiversity – “The foundation upon which we can build back better”

Biodiversity loss threatens the world’s ability to tackle issues such as poverty, hunger, poor health and water shortages – problems that need addressing to future-proof the planet’s liveability and sustain the economy. It amounts to value destruction and as such, it is relevant to us all, whether we are investors, asset managers or ordinary citizens.  

As the sustainable investor for a changing world, we pursue investment returns that can be upheld over the long term and that are in balance with society and the environment.

We believe we cannot deliver long-term returns without working to achieve the energy transition, environmental sustainability and a more equal and inclusive economy – three goals that are central to our approach and business strategy.

Build back better requires biodiversity

The International Day for Biological Diversity[1] reminds us to be mindful of our relationship to the natural world. Despite all its technological prowess, the world depends on healthy and robust ecosystems for water, food, medicines, shelter and energy among other things. In the words of the United Nations, “Biodiversity is the foundation upon which we can build back better”.[2]

Biodiversity resources can be seen as the basis for civilisation: Fish provide 20% of animal protein to some 3 billion people; over 80% of our diet comes from plants; as many as 80% of people living in rural areas in developing countries rely on traditional plant‐based medicines for basic healthcare.[3] It is clear that biodiversity loss has serious consequences.

A year ago, we published our biodiversity roadmap,[4] which details our views on the nature and urgency of this crisis and how we are actively responding to it. We used a variety of tools to understand our own dependencies and impact on nature. In particular, we analysed our global assets under management to understand our exposure to water and deforestation risks.

Integrating biodiversity risk into investment decisions

There is a pressing need for both reliable high-quality raw data from companies and tools to help integrate biodiversity risk into investment decisions. The markets need a consistent framework for understanding and reporting the full range of risks presented by biodiversity loss. 

In 2020, we engaged a research provider to develop a tool to enable investors to measure how our investments affects biodiversity. Collaboration is needed on this data journey. Hence, we are active in biodiversity initiatives and partnerships such as Capitals Coalition, the WWF Biodiversity Risk project and CDP Biodiversity as well as in co-establishing Nature Action 100.

As we move forward, we will continue to encourage the companies we invest in and that have the greatest impact on biodiversity to disclose useable quantitative data on their biodiversity footprint.

Biodiversity infographics


References

[1] On 22 May  

[2] Source: International Day for Biological Diversity | United Nations  

[3] Source: https://www.un.org/en/observances/biological-diversity-day  

[4] ‘Sustainable by nature: our biodiversity roadmap’ available at 940B42EF-AFFF-4C89-8C32-D9BFBA72BF24 (bnpparibas-am.com) 

Disclaimer

Please note that articles may contain technical language. For this reason, they may not be suitable for readers without professional investment experience.

Any views expressed here are those of the author as of the date of publication, are based on available information, and are subject to change without notice. Individual portfolio management teams may hold different views and may take different investment decisions for different clients. The views expressed in this podcast do not in any way constitute investment advice.

The value of investments and the income they generate may go down as well as up and it is possible that investors will not recover their initial outlay. Past performance is no guarantee for future returns.

Investing in emerging markets, or specialised or restricted sectors is likely to be subject to a higher-than-average volatility due to a high degree of concentration, greater uncertainty because less information is available, there is less liquidity or due to greater sensitivity to changes in market conditions (social, political and economic conditions).

Some emerging markets offer less security than the majority of international developed markets. For this reason, services for portfolio transactions, liquidation and conservation on behalf of funds invested in emerging markets may carry greater risk.

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