Museum to Help Federated Hermes Protect Biodiversity

    Stockholm (NordSIP) – Biodiversity protection is gradually becoming one of the major sustainability themes for 2022. That said, for investors eager to put their financial capital to work in sync with natural capital, it might be a challenge to find suitable investment vehicles. Biodiversity-themed fund offerings are still few and far between. To bridge this gap, on 21 March, Federated Hermes announced that they are launching an Article 9 Biodiversity Equity Fund in affiliation with the Natural History Museum.

    “The negative impacts of biodiversity loss pose a systemic risk to the global economy, and we must stop taking nature’s permanence for granted,” comments Ingrid Kukuljan, the new fund’s manager and Federated Hermes’s Head of Impact and Sustainable Investing (pictured). “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 profitable access to this megatrend,” she adds.

    Federated Hermes’s team has identified six main investment themes for the fund, all imminent threats to biodiversity: land pollution, marine pollution and exploitation, unsustainable living, climate change, unsustainable farming, and deforestation. Kukuljan reveals that she intends to invest in a concentrated portfolio of companies helping to preserve and restore biodiversity. To identify those, the manager will rely partly on data collected by the Natural History Museum.

    Federated Hermes will be able to access the wealth of data collected by the scientists working at the Museum through a comprehensive online tool, ‘Biodiversity Trends Explorer’. The Explorer provides an interface to the Museum’s proprietary Biodiversity Intactness Index (BII), which estimates the loss of biodiversity across an area using a combination of land use, ecosystem, species, and population data. The total BII score is an indication of an area’s intactness, i.e., the percentage of its natural ecological community that has not been affected.

    “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,” comments Dr Doug Gurr, Director of the Natural History Museum. “Together, we can bend the curve of biodiversity loss and create a world in which both people and planet can thrive.”

    Federated Hermes will also donate 5% of the net management fee revenue from the new biodiversity fund to the Natural History Museum. “We are gaining critical knowledge by using the data that go into the Natural History Museum’s Biodiversity Trends Explorer, and we are delighted to donate money to fund the Museum’s work as the custodian of one of the world’s most important scientific collections,” says Kukuljan.

    At Federated Hermes, engagement and stewardship are key to their sustainability efforts. This is true even for the new biodiversity fund. As well as investing in companies that offer solutions to the biodiversity crisis, the managers also intend to engage with transitioning companies. To that end, the fund has a dedicated engagement specialist, Sonya Likhtman. Supported by EOS at Federated Hermes, a world-leading provider of stewardship services, Likhtman will ensure engagement with holding companies on topics including climate change, deforestation, sustainable food systems, and plastics.


    Julia Axelsson, CAIA
    Julia Axelsson, CAIA
    Julia has accumulated experience in asset management for more than 20 years in Stockholm and Beijing, in portfolio management, asset allocation, fund selection and risk management. In December 2020, she completed a program in Sustainability Studies at the University of Linköping. Julia speaks Mandarin, Bulgarian, Hindi, Russian, Swedish, Urdu and English. She holds a Master in Indology from Sofia University and has completed studies in Economics at both Stockholm University and Stockholm School of Economics.

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