The Natural History Museum has provided data insights to Federated Hermes for its new Biodiversity Equity Fund.
Classified as Article 9 under SFDR, the fund will invest in a concentrated portfolio of companies focused on the preservation and restoration of biodiversity, to generate long-term capital appreciation for investors.
Research conducted by the team at Federated Hermes identified the main threats to biodiversity, both regionally and globally, which form the six main themes for the fund, including land pollution, marine pollution and exploitation, unsustainable living, climate change, unsustainable farming practices and deforestation.
Head of impact and sustainable investing at Federated Hermes, and lead manager of the fund, Ingrid Kukuljan, said: “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 [with] profitable access to this megatrend.”
The Natural History Museum recently developed the Biodiversity Intactness Index, a metric used to calculate biodiversity loss across a set area. Factors such as land use, ecosystem, species and population data produce an ‘intactness’ figure, which translates to the percentage of natural ecological community remaining in the studied area.
Last year, the museum released the Biodiversity Trends Explorer, enabling access to the BII data. Users of the online tool compare the differing states of ecosystem diversity around the world.
Kukuljan and her team at Federated Hermes have made use of the data to determine the viability of investment opportunities.
Dr Doug Gurr, director of the Natural History Museum, said: “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.”
Sonya Likhtman will also work on the fund as an engagement specialist, with the support of EOS at Federated Hermes, a stewardship services provider.
Federated Hermes will donate 5% of the fund’s net management fee revenue to the Natural History Museum.
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