‘We struggle to find biodiversity champion companies in Asia’ – ESG Clarity
'We struggle to find biodiversity champion companies in Asia' ESG Clarity
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Preventing Biodiversity Loss in Asia: The Role of Private Finance
Asia, known for its rich biodiversity, plays a crucial role in addressing climate change through both mitigation and adaptation efforts. However, private finance in the region is still in its early stages, according to Ingrid Kukuljan and Sonya Likhtman from Federated Hermes. They emphasize the need for greater attention and commitment to biodiversity preservation in Asia.
Illegal Forest Conversion and Carbon Emissions
Data from the World Resources Institute reveals that 81% of illegal forest conversion, which contributes to 2.7 gigatonnes of carbon dioxide emissions annually, occurs in Asia.
Lack of Awareness and Commitment
Ingrid Kukuljan, head of impact and sustainable investing at Federated Hermes Limited, highlights the lack of awareness and commitment to biodiversity preservation in Asia compared to the Western world. She points out that industrial farming practices and the increasing consumption of animal protein are major contributors to biodiversity loss in the region.
Federated Hermes’ Biodiversity Fund
Federated Hermes’ inaugural biodiversity fund does not have exposure to Asia due to the challenge of finding publicly-quoted companies that meet their standards as biodiversity champions. The fund aims to allocate capital only to companies that contribute to preserving or restoring biodiversity.
Measuring Biodiversity: A Data Challenge
Sonya Likhtman, associate director within the engagement and stewardship team at Federated Hermes, explains that measuring biodiversity remains a challenge. While there is growing data and mapping capabilities for species, assessing the value of natural capital and ecosystem services derived from nature is complex. Likhtman mentions ongoing efforts in natural capital accounting but emphasizes the need to act on halting and reversing biodiversity loss with the available data.
Federated Hermes Biodiversity Fund
The Federated Hermes biodiversity fund focuses on six themes: land pollution, marine pollution and exploitation, sustainable living, climate change, farming, and deforestation. It consists of 150 stocks and is overweight on industrials and materials. The top five holdings are Tetra Tech (5.58%), AECOM (5.52%), Tomra Systems (4.74%), Kerry (4.67%), and Brambles (4.29%).
Expanding Private Finance for Biodiversity
The Federated Hermes biodiversity fund is part of a growing number of funds dedicated to biodiversity preservation. The Global Biodiversity Framework agreed at COP15 has increased the focus on scaling up financing and involving the private sector, including in Asia. Aligning public and private financial flows with biodiversity goals is crucial to reduce negative impacts on biodiversity. Both increased financing for nature and the cessation of activities that harm biodiversity are necessary for effective preservation efforts.
SDGs, Targets, and Indicators
SDGs Addressed or Connected to the Issues Highlighted in the Article:
- SDG 13: Climate Action
- SDG 15: Life on Land
- SDG 17: Partnerships for the Goals
Specific Targets Based on the Article’s Content:
- Target 13.2: Integrate climate change measures into national policies, strategies, and planning
- Target 15.5: Take urgent and significant action to reduce the degradation of natural habitats, halt the loss of biodiversity, and protect and prevent the extinction of threatened species
- Target 17.17: Encourage and promote effective public, public-private, and civil society partnerships, building on the experience and resourcing strategies of partnerships
Indicators Mentioned or Implied in the Article:
- Illegal conversion of forests produces 2.7 gigatonnes of carbon dioxide annually, with 81% of this happening in Asia (indicator for Target 13.2)
- Livestock accounts for 60% of all mammals, while wildlife only accounts for 4%, indicating the impact of industrial livestock farming (indicator for Target 15.5)
- The Federated Hermes biodiversity fund focuses on land pollution, marine pollution, exploitation, sustainable living, climate change, farming, and deforestation (indicators for Target 15.5)
- The Global Biodiversity Framework aims to increase impact investing, blended finance, and innovative methods of financing for nature (indicator for Target 17.17)
Table: SDGs, Targets, and Indicators
| SDGs | Targets | Indicators |
|---|---|---|
| SDG 13: Climate Action | Target 13.2: Integrate climate change measures into national policies, strategies, and planning | – Illegal conversion of forests produces 2.7 gigatonnes of carbon dioxide annually, with 81% of this happening in Asia |
| SDG 15: Life on Land | Target 15.5: Take urgent and significant action to reduce the degradation of natural habitats, halt the loss of biodiversity, and protect and prevent the extinction of threatened species | – Livestock accounts for 60% of all mammals, while wildlife only accounts for 4% – The Federated Hermes biodiversity fund focuses on land pollution, marine pollution, exploitation, sustainable living, climate change, farming, and deforestation |
| SDG 17: Partnerships for the Goals | Target 17.17: Encourage and promote effective public, public-private, and civil society partnerships, building on the experience and resourcing strategies of partnerships | – The Global Biodiversity Framework aims to increase impact investing, blended finance, and innovative methods of financing for nature |
Analysis:
1. The issues highlighted in the article are connected to SDG 13: Climate Action, SDG 15: Life on Land, and SDG 17: Partnerships for the Goals. These SDGs address the need to tackle climate change, preserve biodiversity, and promote partnerships for sustainable development.
2. Based on the article’s content, the specific targets that can be identified are:
– Target 13.2: Integrate climate change measures into national policies, strategies, and planning.
– Target 15.5: Take urgent and significant action to reduce the degradation of natural habitats, halt the loss of biodiversity, and protect and prevent the extinction of threatened species.
– Target 17.17: Encourage and promote effective public, public-private, and civil society partnerships, building on the experience and resourcing strategies of partnerships.
3. The article mentions or implies several indicators that can be used to measure progress towards the identified targets:
– Illegal conversion of forests produces 2.7 gigatonnes of carbon dioxide annually, with 81% of this happening in Asia. This indicates the need to integrate climate change measures into national policies and strategies (Target 13.2).
– Livestock accounts for 60% of all mammals, while wildlife only accounts for 4%. This highlights the degradation of natural habitats and the loss of biodiversity (Target 15.5).
– The Federated Hermes biodiversity fund focuses on land pollution, marine pollution, exploitation, sustainable living, climate change, farming, and deforestation. These themes serve as indicators for taking action to reduce habitat degradation and biodiversity loss (Target 15.5).
– The Global Biodiversity Framework aims to increase impact investing, blended finance, and innovative methods of financing for nature. This indicates the need to promote partnerships for sustainable development (Target 17.17).
Overall, the article emphasizes the importance of addressing biodiversity loss in Asia and the role of private finance in supporting sustainable development goals related to climate action, biodiversity preservation, and partnerships.
Behold! This splendid article springs forth from the wellspring of knowledge, shaped by a wondrous proprietary AI technology that delved into a vast ocean of data, illuminating the path towards the Sustainable Development Goals. Remember that all rights are reserved by SDG Investors LLC, empowering us to champion progress together.
Source: esgclarity.com
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