A company working in precision agriculture helped avoid the loss of 1,216 species worldwide throughout 2022, US-headquartered asset manager Federated Hermes has suggested.

Federated Hermes has calculated the biodiversity impacts of investee companies using its own methodology, incorporating London’s Natural History Museum’s Biodiversity Intactness Index (BII) data.

An unnamed investee company that sells precision agriculture equipment helped avoid the loss of 1,216 species in 2022, said Ingrid Kukuljan, head of impact and sustainable investing at Federated Hermes.

The figure reflects the preservation of species in areas where the equipment was sold, “so it is an important measure given the local nature of biodiversity loss”, she said during the Natural Capital Summit in London.

Precision agriculture technology aims to manage fertiliser and irrigation processes more sustainably based on monitoring and observations. “This company provides solutions that increase farmer yields on average by 10-15%,” she said.

Federated Hermes made its calculations by combining the regional breakdown of sales of precision agriculture equipment with each area’s BII factors, Kukuljan said. It also incorporated data on CO2 emissions, water loss, and land impacts, she said.

The precision agriculture company also helped avoid the change of use of land equivalent to 776,997 hectares in 2022, she said.

Source: Federated Hermes

The BII measures biodiversity change using abundance data on species worldwide. The index estimates the abundance of species of birds, mammals, plants, fungi, and insects on any given area throughout the world. It uses satellite imagery, algorithms, and field data.

The land in Latin America is “more valuable” than that in North America based on the BII metric, she said.

BIODIVERSITY CHAMPIONS

The calculation follows Federated Hermes focusing on analysing the impacts and dependencies of companies held in its portfolio, Kukuljan said.

“We decided to take a road less travelled by focusing on those corporates that we consider to be biodiversity champions, those that are helping provide loss and restore biodiversity. Given the systemic risk biodiversity poses to the global economy, we believe those companies will be the future winners.”

“We came out with a watch list of about 150 companies out of a global market capitalisation of about 9,000,” she said.

BII has enabled Federated Hermes to map out different outcomes for its portfolio based on various possible environmental futures.

“Not many companies like to disclose their supply chains, but you can use the BII to make a pretty good estimation of supply chain impacts and dependencies,” she said.

By Thomas Cox – t.cox@carbon-pulse.com

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