With the joint ambition of raising awareness and promoting protection of biodiversity, Federated Hermes has launched a Biodiversity Equity Fund with insights from the Natural History Museum. The Fund is managed by Ingrid Kukuljan, Head of Impact and Sustainable Investing and is classed at Article 9 under SFDR criteria.
“We are delighted to see the launch of this fund encouraging investment in companies that are helping to preserve and restore biodiversity, and thrilled to see Federated Hermes adopting the Museum’s Biodiversity Trends Explorer. Together we can bend the curve of biodiversity loss and create a world in which both people and planet can thrive.”Dr Doug Gurr, Natural History Museum’s Director
The Fund meets critical demand for solutions delivering global goals on biodiversity and aims to achieve long-term capital appreciation by investing in a concentrated portfolio of companies that are helping to preserve and restore biodiversity.
The team at Federated Hermes has extensively researched the major regional and global threats to biodiversity. They have defined six themes for the Fund: land pollution, marine pollution and exploitation, unsustainable living, climate change, unsustainable farming, and deforestation. These discrete themes contain businesses which help mitigate the loss of, or provide solutions to, the specific biodiversity risks they bear. Each of these themes has multiple sub-verticals that are aligned to specific UN Sustainable Development Goals (SDGs).
“The negative impacts of biodiversity loss pose a systemic risk to the global economy and we must stop taking nature’s permanence for granted. We believe now is a crucial moment to invest in the companies that help mitigate biodiversity decline. We are convinced that there is a cohort of quality, investible, stocks which provide investors profitable access to this megatrend.Ingrid Kukuljan, Lead Manager
Sonya Likhtman, engagement specialist, is a dedicated engager on the Fund and will be supported by EOS at Federated Hermes, a world-leading provider of stewardship services. Sonya will ensure engagement with holding companies on topics including climate change, deforestation, sustainable food systems, and plastics.
The Natural History Museum has developed a scientifically rigorous metric, the Biodiversity Intactness Index (BII) which estimates the loss of biodiversity across an area using a combination of land use, ecosystem, species and population data to give a simple figure for ‘intactness’, that is, what percentage of the area’s natural ecological community still persists there. Last year, the Museum opened up the BII data through an online tool, the Biodiversity Trends Explorer, to enable users to compare the state of local ecosystem biodiversity among countries as well as how different possible economic futures will affect nature in developed and developing countries over the coming decades. Ingrid and her team are making use of such data to help support and inform investment decisions for the strategy.
Federated Hermes and the Natural History Museum have been working together to explore how the Museum’s biodiversity experts and data scientists can help establish the bridge between observed biodiversity impacts, and the products and services that investment companies enable. Federated Hermes will also donate 5% of the net management fee revenue from this Fund to the Natural History Museum.
“We are gaining critical knowledge by using the data that go into the Natural History Museum’s Biodiversity Trends Explorer and we are delighted to donate money to fund the Museum’s work as the custodian of one of the world’s most important scientific collections.”Ingrid Kukuljan, Lead Manager