Asset manager addresses biodiversity, climate in natural capital index strategy launch

Published 06:32 on February 3, 2023  /  Last updated at 06:32 on February 3, 2023  / Stian Reklev /  Biodiversity

UK-headquartered Northern Trust Asset Management has launched the World Natural Capital Paris-Aligned Index Strategy, an investment tool that integrates climate and natural capital considerations to address the twin crises of climate change and biodiversity loss.

UK-headquartered Northern Trust Asset Management has launched the World Natural Capital Paris-Aligned Index Strategy, an investment tool that integrates climate and natural capital considerations to address the twin crises of climate change and biodiversity loss.

The new tool is the latest in a series of sustainable index investment solutions applied by Northern Trust, which has more than $1 trillion in assets under management, making it among the world’s biggest asset managers.

“We are delighted to launch this strategy for investors across EMEA and APAC, recognising that nature related risk mitigation and adaptation can play a significant role in achieving the Paris Agreement global warming objective,” said Julie Moret, global head of sustainable investing and stewardship at Northern Trust AM.

“Investors are increasingly considering a wider spectrum of interconnected environmental considerations when looking to reflect the objectives of a transition to a climate-resilient economy. This strategy offers a compelling solution for them.”

The risks involved in investing in companies whose activities are at odds with national or global climate change or biodiversity targets are making a growing number of financial institutions deploy internal solutions to aid them in their investment decisions, or make use of the rapidly emerging services offered by third-parties.

Northern Trust AM said its new index strategy aims to closely match the risk and return characteristics of the MSCI World Natural Capital Paris-Aligned Equity Select Index, an index that screens companies linked to ecosystem loss and water pollution, as well as those not aligned with the UN Sustainable Development Goals pertaining to life below water and life on land.

“The range of MSCI climate indexes is specifically designed to help investors develop portfolios that meet their net zero commitments, integrate climate considerations, and fulfil their investment objectives,” Sebastian Lieblich, MSCI head of ESG and climate indexes, said.

“We are pleased to support this launch with an index seeking efficient exposure to broad global equity markets with risk-controlled tilts towards positive climate change and natural capital-related objectives.”

By Stian Reklev – stian@carbon-pulse.com

*** Click here to sign up to our weekly biodiversity newsletter ***