Biodiversity in Crisis: Erste Asset Management publishes a new policy

The global biodiversity crisis is a threat to our planet. Our financial and economic systems are not exempt from this. However, investments in nature also offer opportunities. With a new biodiversity policy, Erste Asset Management (Erste AM) therefore defines concrete measures and goals that Erste AM integrates via engagement initiatives and voting as an active investor.

Biodiversity in crisis

The deterioration of ecosystems is, on the one hand, a challenge to the resilience of the planet. On the other hand, the profitability and stability of financial systems are also threatened by the impact of the biodiversity crisis. For example, according to UNEP FI (United Nations Environment Programme Initiative), the production processes of 13 of the 18 sectors represented in the FTSE 100 have a high or very high degree of material dependence on nature.

 

“While we humans are spending a lot of resources trying to find methods to eliminate  greenhouse gases from the atmosphere, our nature has had working solutions in real use for millions of years. While we enthusiastically search for artificial intelligence, we forget about the natural intelligence that surrounds us.”

Walter Hatak, Head of Responsible Investments Erste AM

 

This illustrates that the loss of nature and biodiversity constitutes a major risk for companies. However, investing in nature also offers opportunities. New legal frameworks such as the EU Renaturation Act, the EU Taxonomy or the CSRD disclosure requirement will help to support investments in products and services that contain fewer risks to nature.

Measures within the context of our investments

A positive contribution is also possible in the area of capital investment: on the one hand directly, such as through the long-standing partnership of Erste AM and WWF Austria with the ERSTE WWF STOCK ENVIRONMENT fund (N.B. please note the legal information on the fund mentioned). Over the past 20 years, more than EUR 5mn has been invested in biodiversity projects. On the other hand, also indirectly, through investments in, and dialogue with, companies.

As part of the investment process, Erste AM already bears in mind challenges related to the preservation of biodiversity and ecosystems, for example through the evaluation of sustainable land use and sustainable water management. This includes assessing companies according to their water risk, their water management, and their contribution to water-saving products and services. In addition, Erste AM also evaluates companies on the proximity of their operations to sensitive ecosystems, as well as their involvement in controversies regarding deforestation.

Commitment to the conservation of biodiversity

As a first step towards an even more targeted integration of biodiversity issues, Erste AM signed the “Statement from the private financial sector to the conference of the parties to the convention on biological diversity”, which was created by UNEP FI, among others. This statement was signed by 154 financial institutions with more than USD 24.8 trillion in assets under management. The Commitment includes a commitment to “contribute to the protection and restoration of biodiversity and ecosystems through financing activities and investments”.

Goals until 2030

With the help of the now published Biodiversity Policy, we also want to formally integrate these agendas into the processes of Erste AM. To this end, and in order to live up to our own claim to promote biodiversity, we have defined targets that are to be achieved by 2030:

• We will implement specific data on biodiversity and ecosystems in the active ownership approach to identify companies with biodiversity risks and potential for improvement in this context.
• We shall support shareholder resolutions specifically related to biodiversity and ecosystem. This has already been stated in Erste AM's Voting Policy.
• We will launch engagement initiatives with companies identified as having potential for improvement. To this end, Erste AM intends to take an active role within the Nature Action 100 initiative. This initiative identifies 100 companies that are relevant from a biodiversity perspective and initiates investor engagement to demand corporate action that promotes the protection and restoration of nature.
• We intend to prepare progress reports on the basis of key indicators to ensure that improvements have indeed been made. In the event of insufficient progress on the part of the companies despite the commitment of Erste AM, the final escalation stage is divestment.

For the Biodiversity Policy of Erste AM, please follow this link.

Insights and information on the topic of biodiversity

In order to draw more attention to the protection of biodiversity and ecosystems, the latest issue of Erste AM's ESGenius Letter is also dedicated to this topic. We have illustrated various aspects of biodiversity in a series of articles.
For example, the ecologist and Scientist of the Year 2022, Franz Essl, has his say and explains the serious effects of the loss of species. Other topics include the current regulatory framework with regard to biodiversity, as well as concrete measures that companies can take, which are highlighted in a guest article by WWF Austria.

For all articles of the latest ESGenius Letter, please follow this link.

For enquiries, please contact:

Erste Asset Management GmbH | Communications & Digital Marketing | Am Belvedere 1, 1100 Vienna 
Paul Severin, +43 (0)50100 19982, E-Mail: [email protected]
Philipp Marchhart, +43 (0)50100 19854, E-Mail: [email protected]
 

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* Warning notices ERSTE WWF STOCK ENVIRONMENT

Benefits for investors

• Broad diversification across companies in the environmental sector even with a small capital investment
• Support of WWF's environmental protection programmes by Erste AM
• Opportunities of attractive gains
• The fund is suitable as an addition to an existing equity portfolio and is intended for long-term substance growth

Risks to bear in mind

• The price of the fund may be subject to significant fluctuations (volatility)
• Due to the investment in foreign currency, foreign exchange fluctuations may affect the value of the fund due to the investment in foreign currency
• Capital loss is possible
• The following risks may be of particular relevance to the fund: credit risk, counterparty risk, liquidity risk, deposit risk, derivative risk, and operational risks. For comprehensive information on the risks of the fund, please refer to the prospectus and to the information for investors according to sec. 21, part II, chapter “Risk notices” of the Austrian Alternative Investment Fund Managers Act

For further information on the sustainable structuring of ERSTE WWF STOCK ENVIRONMENT and information in line with the Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019 on sustainability‐related disclosures in the financial services sector and the Taxonomy Regulation (Regulation (EU) 2020/852), please refer to section 12 and the Appendix, “Sustainability Principles”, of the current prospectus. When deciding to invest in ERSTE WWF STOCK ENVIRONMENT, please take into account all features and goals of ERSTE WWF STOCK ENVIRONMENT as described in the fund documents.

Important legal note

This document is an advertisement. All data is sourced from Erste Asset Management GmbH, unless indicated otherwise. Our languages of communication are German and English.
The prospectus for UCITS (including any amendments) is published in Amtsblatt zur Wiener Zeitung in accordance with the provisions of the InvFG 2011 in the currently amended version. Information for Investors pursuant to § 21 AIFMG is prepared for the alternative investment funds (AIF) administered by Erste Asset Management GmbH, pursuant to the provisions of the AIFMG in connection with the InvFG 2011.
The fund prospectus, Information for Investors pursuant to § 21 AIFMG, and the Key Information Document can be viewed in their latest versions at the web site www.erste-am.com within the section mandatory publications or obtained in their latest versions free of charge from the domicile of the management company and the domicile of the custodian bank. The exact date of the most recent publication of the fund prospectus, the languages in which the Key Information Document is available, and any additional locations where the documents can be obtained can be viewed on the web site www.erste-am.com. A summary of investor rights is available in German and English on the website www.erste-am.com/investor-rights as well as at the domicile of the management company.
The management company can decide to revoke the arrangements it has made for the distribution of unit certificates abroad, taking into account the regulatory requirements. This document serves as additional information for our investors and is based on the knowledge of the staff responsible for preparing it at the time of preparation. Our analyses and conclusions are general in nature and do not take into account the individual needs of our investors in terms of earnings, taxation, and risk appetite. Past performance is not a reliable indicator of the future performance of a fund. Please note that investments in securities entail risks in addition to the opportunities presented here. The value of shares and their earnings can rise and fall. Changes in exchange rates can also have a positive or negative effect on the value of an investment. For this reason, you may receive less than your originally invested amount when you redeem your shares. Persons who are interested in purchasing shares in investment funds are advised to read the current fund prospectus(es) and the Information for Investors pursuant to § 21 AIFMG, especially the risk notices they contain, before making an investment decision. If the fund currency is a currency other than the investor's home currency, changes in the corresponding exchange rate may have a positive or negative impact on the value of his investment and the amount of the costs incurred in the fund - converted into his home currency.
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