Fidelity International today announces the launch of the Fidelity Funds – Sustainable Biodiversity Fund, providing investors access to a global equity portfolio of companies contributing to biodiversity preservation.
Maintaining the Earth’s biodiversity, the balance and variety of plant and animal species, is existentially important to human survival. According to the World Economic Forum, the top three most severe risks on a global scale over the next 10 years are linked to biodiversity loss.
The investment potential is vast; the UN Environment Programme conservatively estimates that meeting international biodiversity commitments will require $8.1 trillion of cumulative investment in nature-based solutions between now and 2050, although the number is significantly higher if you consider the interlinked relationships with climate change, which requires a further $117 trillion in investment by 2050. The annual investment in biodiversity preservation is currently $133 billion, while the spending in solving climate change was c. $800 billion in 2021.
Managed by Velislava Dimitrova, the fund taps into this megatrend, aiming to achieve long-term capital growth by investing in companies which contribute to the improvement of global biodiversity preservation in two ways. Firstly, the Fund invests in the value chain of companies involved in providing ‘solutions’ to reduce biodiversity loss. Secondly, the Fund allocates capital towards biodiversity ‘best-in-class’ companies. These are defined as companies which are either market-leading in terms of their own operational improvement to minimise impact on biodiversity, or companies developing new solutions to address biodiversity loss. Both the solution providers and the best-in-class companies span many areas of economic activity and are diversified on a global and sector basis.
“In the past, market participants have taken nature for granted, viewing this capital stock as a perpetual resource. But evidence shows that nature continues to degrade as a result of human activity. The world is now waking up to the urgent threat to biodiversity and natural capital. Biodiversity investment solutions are emerging as the largest investment megatrend in our generation and provides opportunities for investors. The theme is at an inflection point, and belatedly transforming from a neglected risk into a top priority.”Velislava Dimitrova, Portfolio Manager at Fidelity International
“By approaching biodiversity loss from a 360-degree lens, this product can invest across a range of sectors and opportunities, presenting a diversified product structure. It can flex its remit across industries, regions, and market capitalisations to find the best ideas from an alpha generation and biodiversity preservation perspective.”Christophe Gloser, Head of Sales, Continental Europe, Fidelity International