ESG Roundtable: The biodiversity challenge and Fixed Income portfolios
Liudmila Strakodonskaya and Bruno Bamberger outline the risks that biodiversity loss can pose for Fixed Income investors and discuss what steps can be taken today to help assess and manage exposure.
Key take-aways:
Why does biodiversity loss present challenges for investors and how can active fixed income managers integrate nature-related risk considerations into their portfolios? Watch the replay to find out more. Topics included:
- Biodiversity loss is a material risk for investors of all types across asset classes.
- Like climate, as awareness of the key drivers of biodiversity loss has risen, so have regulatory and industry efforts to tackle the problem; requirements for investors to measure and report on exposure to biodiversity risk are coming.
- Industry initiatives and collaborations to develop decision-useful metrics are gathering pace. Leading asset managers in the field, like AXA IM, are working with innovative data providers such as Iceberg Data Lab to create methodologies that can track the impact companies have on nature and biodiversity.
- There are specific considerations associated with biodiversity loss for fixed income investors. While biodiversity-positive business models could lead to stronger long-term viability for companies and a greater ability to repay debt, laggard issuers could face increased risk of downgrades and defaults from emerging and material nature and climate risks.
- Three steps - Aim, Integrate and Monitor - you can take today to help prepare your portfolio and help tackle the biodiversity crisis.
Why, and how, investors should integrate biodiversity into fixed income portfolios
Managing risks, having a positive impact and meeting regulations are three reasons why fixed income investors should consider biodiversity within their portfolios.
Read the full write-up
Disclaimer
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Risk Warning
The value of investments, and the income from them, can fall as well as rise and investors may not get back the amount originally invested.