Climate and Biodiversity: Time for Action
Well before COP26, which opened in Glasgow this month, there was COP1. The first annual Climate Change Conference was held in Berlin in 1995, with Germany’s then-Minister of the Environment, Angela Merkel. The scientific community had been flooding us with warnings long before that.
Well before Covid-19, too, scientists were sounding the alarm about the link between climate change and declining biodiversity, and about the risks of epidemics proliferating. In spite of everything, CO2 emissions, the degradation of the land and the oceans, pollution, and climate change are accelerating at an unprecedented rate.
We are all responsible, and we can all take action. As committed investors for 30 years, we believe that finance has a crucial role to play in protecting biodiversity and the climate. That is why we have adopted a strict Carbon Policy and an ambitious Climate Strategy. Acting on the Finance for Biodiversity Pledge, we have committed to including biodiversity criteria in our analyses, measuring the impact of our investments, and publishing them fully transparently by 2024. These actions mark our drive to increase our commitment with companies, the key links in safeguarding biodiversity and combating climate change.
Through our funds, we are investing in businesses that offer solutions, such as Norway’s AKER CARBON CAPTURE1, which is developing a solution that applies all along the chain – carbon capture, transport and storage – with the target between now and 2025 of preventing 10 million tonnes of CO2, the equivalent of one year’s emissions from the city of Marseille. Another example is SVENSKA CELLULOSA, Europe’s leading forest owner, whose products have a high environmental impact: its forests are carbon sinks and havens of biodiversity, with 7400 species including 982 protected species, and their wood-based products (construction and packaging) can replace harmful products like plastic. To meet the multidimensional risk of these interconnected challenges to social issues, we are investing in all sectors of the European economy, including oil and transportation, which are responsible for 40% and 25% of global CO2 emissions2. We believe investing in these sectors is the key to generating a real impact3. We are supporting players who have begun a genuine transition by defining environmental, social and governance areas for progress. This includes Finnish refiner NESTE, whose transition to renewable diesel has been rapid and thorough. Renewable diesel, formulated with 100% renewable materials such as used cooking oil, reduces greenhouse gas emissions by up to 90% compared to traditional diesel for road haulage and 80% for air freight. NESTE’s ambition is to cut its customers’ emissions by 20 million tonnes per year by 2030.
These challenges create opportunities, specifically under the impact of green stimulus plans such as the European Green Deal, which foster capital flows to certain industries and create opportunities for sustainable growth, without compromising – quite the contrary – on performance.
Climate and biodiversity are non-negotiable challenges that concern all of us. That is why the Climate and Biodiversity Meetings that we will be hosting in late November will bring businesses, clients, and experts together over issues of climate, biodiversity, and European taxonomy, to spur best practices. Let’s make sure we won’t be fighting with our backs against the wall. Let’s take further inspiration from the words of Leonardo da Vinci: “Learn from nature: that is where our future lies”.
Olivier de Berranger, CIO and Head of Asset Management, La Financière de l’Echiquier,
and Paul Merle, Fund Manager
1.The securities and sectors mentioned above are given by way of example. There is no guarantee they will remain in the portfolio over time.
2. IEA, 2020
3. Investing in the financial markets carries a risk. The primary risks are capital risk, equity risk and currency risk. For more information on its characteristics, risks and costs, and before making any investment, we encourage you to learn about product characteristics, main risks, and costs by referring to the regulatory documents for these products, available on our website at www.lfde.com.
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