PI Partnership – Pictet Asset Management
The financial industry – banks, asset managers and asset own- ers – has for too long ignored the threat biodiversity loss pre- sents to human prosperity and growth. It must now acknowl- edge the crucial role it has to play in repairing the biosphere and placing the economy on a more sustainable footing.
Biodiversity finance Even if businesses and investors advance their understanding of how they impact and are impacted by biodiversity loss, such efforts will come to nothing without an accompanying revolu- tion in biodiversity-related capital.
There have been high-profile launches of funds investing in companies specialised in biodiversity restoration and ecosys- tem services in the past couple of years, with nine out of 11 such funds having debuted since 2020. Funds investing in biodiversity and natural capital aim to help embed more sustainable and regenerative business practices across a whole value chain, involving industries such as agri- culture, forestry, IT, fishery, materials, real estate, consumer discretionary and staples, utilities and pharmaceuticals.
Conclusion: designing a nature-positive financial system For more than 10,000 years, human prosperity has centred on the drawing down of natural capital – the world’s stock of food, clean air, water and fertile soil. But in recent decades, those resources have been used at a faster rate than they can be replenished.
This unsustainable approach to economic development has had a devastating effect on ecosystems. Encouragingly, momentum is building among policymakers and regulators to establish a new, legally binding global accord to reduce biodi- versity loss. Attempts by governments and regulators to measure – and attach a value to – nature’s contribution to the economy repre- sents considerable progress. But policymakers cannot turn the
tide on their own. The corporate and financial sector must also do more to place the world on a path to sustainable growth. To begin with, businesses and investors require a clearer understanding of the risks biodiversity degradation presents to their bottom line and portfolios. The threats are not just physi- cal. They are regulatory, legal and reputational as well. Yet the financial industry and the investment community can also make a bigger contribution to help restore what has been lost. By developing a thriving natural capital market, investors can help shift capital flows away from businesses and projects that degrade the natural environment and towards regenera- tive initiatives. Nature has always been the economy’s most important asset. It is time the finance industry recognised that.
This material is for distribution to professional investors only. However it is not intended for distribution to any person or entity who is a citizen or resident of any locality, state, country or other jurisdiction where such distribution, publication, or use would be contrary to law or regulation. Information used in the preparation of this document is based upon sources believed to be reliable, but no representation or warranty is given as to the accuracy or completeness of those sources. Any opinion, estimate or forecast may be changed at any time without prior warning. Investors should read the prospectus or offering memorandum before investing in any Pictet managed funds. Tax treatment depends on the individual circumstances of each investor and may be subject to change in the future. Past performance is not a guide to future perfor- mance. The value of investments and the income from them can fall as well as rise and is not guaranteed. You may not get back the amount originally invested.
February 2023 portfolio institutional roundtable: Biodiversity
21
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28
