Directing capital to responsible companies that help protect biodiversity is one of the challenges of asset management.
As COP 15 takes place in Montreal until December 19, 2022, the asset management industry has taken up the issue. Ahead of this summit dedicated to biodiversity, a coalition of international investors has called on governments to set ambitious targets and draw up a declaration, Moving Together on Nature, similar to the Paris Agreement.
PROTECTING BIODIVERSITY, A CENTRAL CHALLENGE
The protection and restoration of biodiversity is a collective challenge. Biodiversity is indeed in rapid decline, and the challenges are multiple and urgent. According to the WWF, nearly 70% of the world’s wild animals have already disappeared since the 1970s. And more than 50% of the world’s GDP depends on biodiversity and ecosystem services. We are all concerned and must change our uses to mitigate or reduce pressures on biodiversity, such as land use or pollution. The main challenge for the asset management industry is to accurately measure the negative impacts of our activities on biodiversity, which is the first step to preserving it. As these impacts occur at the local level, they are difficult to measure, but many initiatives are emerging. Strengthening our commitment to companies that integrate biodiversity into their strategy, by supporting them, can accelerate the transition. We are convinced that companies are essential links in the protection of biodiversity. Another important issue: we believe that one of the essential conditions for achieving this is to ensure a fair transition, which takes into account the social aspects of the transition.
In 2023, inflation will have reached a plateau and the world economy is expected to slow down, driven by Europe which, affected by the energy crisis, could enter a recession.
[…]
ENCOURAGING PROSPECTS
In our inflationary environment, defensive growth stocks and quality stocks with high pricing power, such as AstraZeneca or L’Oréal, are doing well. This is also the case, for example, of the medical imaging leader Siemens Healthineers.
In 2023, inflation will have reached a plateau and the global economy is expected to slow down, driven by Europe which, affected by the energy crisis, could enter a recession. But at the global level, there are still encouraging factors, such as the fall in commodity prices since the summer, the high household savings rate and the probable end of the Zero Covid policy in China. In addition, the banking system in the eurozone is well capitalized, unlike in the past. Finally, valuations have moderated in Europe, which offers entry points for some quality stocks. If we look ahead 3/5 years, we believe this can be an interesting entry point and contribute to the protection and restoration of biodiversity.
————————————————————————————–
Source: Allnews | 16 dec 2022 | Luc Olivier, La Financière de l’Echiquier.
Link to the online article (FR)
Luc Olivier, CFA financial and SRI analyst.
Luc graduated in finance from EDHEC in 2017 and completed several internships as an SRI analyst at EthiFinance as well as at La Financière de l’Echiquier and then joined Exane in London as a financial analyst. Luc joined the management team of La Financière de l’Echiquier in August 2017 as a financial and SRI analyst.
La Financière de l’Echiquier (LFDE) has been investing in companies for over 30 years and is one of France’s leading entrepreneurial asset management companies. A specialist in European and international stock selection, LFDE has developed a range of responsible and thematic solutions. Present in Switzerland since 2010, LFDE manages €14.5 billion as of 31.12.2021.