Biodiversity and health - an inextricable link
A molecule that can slow down or delay the onset of Alzheimer’s disease in a marine sponge, anti-cancer molecules in trees, antibiotics in a fungus: nature is a tremendous source of molecular diversity and immense therapeutic hopes – but this is now under threat. One million animal and plant species used for food, energy and medicines are threatened with extinction, a first in human history. This figure from the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES)1 reminds us how dependent our lives are on wild plants and animals. 70% of cancer drugs are natural or synthetic products that have been inspired by nature2.
All the major active substances discovered by man come from nature. We need to combat the deforestation, ocean warming and climate change that are impacting the living fabric of our planet and destroying our pharmacy of the future – and there are solutions available. There is still time to act, and groups that are highly dependent on biodiversity as well as the pioneering companies in which Echiquier Climate & Biodiversity Impact Europe3 invests are showing the way.
Companies – a key link in the biodiversity chain
Some companies are rolling out initiatives aimed at protecting and restoring biodiversity, thereby delivering transformative change. One example is UK speciality chemicals firm CRODA4, which produces seed coatings that lower water and nutrient requirements and reduce pressure on the land. Another is Danish biotech company NOVOZYMES, a global leader in enzyme production whose active ingredients from nature are becoming essential for food preservation and water purification.
Other companies are seeking to combat or reduce the pressures on biodiversity that have increased the risk of new zoonotic diseases, as we saw with the emergence of Covid-19. Deforestation, intensive livestock farming and urbanisation are causing habitat loss, displacing animals and increasing contact between animals and humans. When Covid came along, messenger RNA technology enabled vaccines to be produced much faster than with traditional methods, protecting us sooner from the most severe forms of the disease. Some of our portfolio companies are developing the critical active ingredients needed: CRODA produces the lipids that are an essential component in messenger RNA vaccines, and Swiss group LONZA has worked on behalf of the major pharmaceutical companies.
But our best defence – and the most effective way to achieve transformative change – is to stop deforestation and soil artificialisation. Some companies have understood this. ASTRAZENECA, which is highly dependent on nature for its active ingredients, is implementing ambitious climate and biodiversity initiatives. The aim of its AZ Forests programme is to plant and maintain 50 million trees worldwide by the end of 2025. NESTLE, meanwhile, has embarked on an ambitious plan to fund reforestation within its supply chain, which should see 200 million trees planted on its farmers’ land by 2030.
The loss of biodiversity is not only an environmental problem; it is also a social issue, and one that is directly linked to our health. It also relates to the financial health of companies, which will be heavily destabilised by the loss of biodiversity or strengthened – if they develop solutions that help preserve biodiversity.
3The fund is primarily exposed to the risk of capital loss, equity risk and discretionary management risk. For more information on its features, risks and fees, please read the regulatory documents available at www.lfde.com.
4The stocks referred to are given by way of example. There is no guarantee they will remain in the portfolio over time.
Disclaimer: The decision to invest in the promoted fund should not be based exclusively on its non-financial approach and should take the fund’s other features, as described in its prospectus, into account. Investors should note that their investment in the fund does not generate a direct impact on the environment or the company, but that the fund seeks to select and invest in companies that meet the specific criteria set out in the management strategy.
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