A Vancouver-based asset manager has launched an investment screen focused on biodiversity in an effort to align its portfolio with conservation goals.

Wealth manager Genus Capital Management introduced the screen to emphasise how prioritising biodiversity contributes to environmental preservation while also increasing financial returns, it said in a press release.

Genus’ screen is informed by MSCI’s Biodiversity Screening Metrics, a tool designed to enable investors to measure impact and manage risk and opportunities related to biodiversity loss among others.

“[We] employ data from MSCI to exclude 40 of the lowest-performing companies in terms of biodiversity impact … and exclude companies facing criticism for unsustainable practices, such as Bath & Body Works’ palm oil sourcing,” the firm said.

The screen targets “underperforming” companies in raw materials sourcing, water stress, and biodiversity.

“By excluding companies with low biodiversity performance from our clients’ portfolios, we aim to contribute to the preservation of our natural capital while providing investors with opportunities for both ethical and financially sound investments,” said Mike Thiessen, the company’s chief sustainability officer and co-chief investment officer.

“Genus highlights the potential link between biodiversity and financial success, demonstrating that responsible investing can align with both environmental and financial goals,” the company said.

“Biodiversity risks are recognised as systemic threats to portfolios and beneficiaries, underscoring the economic significance of biodiversity conservation … Investing in nature is positioned as a strategy to improve equity and economic returns.”

In January, German index engineering firm Solactive, bank Societe Generale, and Iceberg Data Lab developed a range of biodiversity-screened index strategies to try to enable investors to consider companies’ impact on biodiversity – the Solactive Transatlantic Biodiversity Screened 100 RW Index, the Solactive Transatlantic Biodiversity Screened 150 CW Index, and the Solactive Transatlantic Biodiversity Screened Index.

Biodiversity screens have faced criticism for only excluding companies with the worst impacts on nature, rather than guiding capital into those leading on environmental action, while presenting investors as more eco-conscious.

By Giada Ferraglioni – giada@carbon-pulse.com

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