As the sustainable investor for a changing world, BNP Paribas Asset Management believes it is essential to understand the impact of environmental change on the economy as fully as possible. Accordingly, we have been assessing our dependencies and impacts to better inform investment decisions.
When, as investors, we talk about dependencies and impacts, we are on one hand referring to the factors within the natural world on which the businesses we invest in depend. On the other hand, this concerns the impact on nature of the activities pursued by the companies we invest in.
First and foremost, this is about evaluating the exposure in our portfolios to water and deforestation risk. Questions include water intensity and exposure to water stress. On deforestation, the issues involve, for example, timber product sourcing and policies and procedures for sourcing commodities whose production has been linked to deforestation such as soy, palm oil, and cattle.
For more on BNPP AM’s biodiversity dependencies and impacts, and our efforts to establish standard biodiversity measurements and disclosures, watch this video with Robert-Alexandre Poujade.
Investors seeking opportunities in the area of biodiversity loss related solutions can find well-measured, diverse and transparent thematic investment strategies such those developed by BNP Paribas Asset Management, whose current thinking is detailed in its biodiversity positioning paper.
Any views expressed here are those of the author as of the date of publication, are based on available information, and are subject to change without notice. Individual portfolio management teams may hold different views and may take different investment decisions for different clients.
The value of investments and the income they generate may go down as well as up and it is possible that investors will not recover their initial outlay.
Investing in emerging markets, or specialised or restricted sectors is likely to be subject to a higher-than-average volatility due to a high degree of concentration, greater uncertainty because less information is available, there is less liquidity or due to greater sensitivity to changes in market conditions (social, political and economic conditions).
Some emerging markets offer less security than the majority of international developed markets. For this reason, services for portfolio transactions, liquidation and conservation on behalf of funds invested in emerging markets may carry greater risk.