Stockholm (NordSIP) – According to data by the OECD and related research, the world produced nearly 460 million tonnes of plastic in 2019, much of which will eventually end up as pollution, eroding ecosystems that are unable to naturally recycle these materials.
To address this concern, AXA Investment Managers (AXA IM) announced the launch of the AXA WF ACT Plastic & Waste Transition Equity QI fund. ACT range investments purposefully support the transition to a more sustainable economy. According to AXA IM, these funds have been assigned themes aligned to ESG and/or UN’s Sustainable Development Goals (SDGs). This fund is particularly focused on Responsible Consumption and Production (SDG 12), by investing in companies that are limiting or managing in a sustainable way their plastic use or have efficient waste management practices.
“Companies that are reducing waste and supporting a more sustainable approach to their use of plastic play a key role in the effort to mitigate climate change and stem biodiversity loss,” Jonathan White, Head of Investment Strategy & Sustainability in AXA IM Equity QI team, said, commenting on the launch of the fund
Using AI to Parse Through Funds
The Plastic & Waste Transition fund invests in large, mid- and small-cap companies across developed and emerging markets. According to AXA IM, the selection and weightings of the stocks uses a proprietary quantitative process that incorporates both financial and non-financial data with the objective of identifying fundamental drivers of risk and return whilst structuring the portfolio in a way that meets the fund’s SDG objectives.
The fund manager explains that “the management team uses Natural Language Processing (NLP) to increase exposure to companies that are actively articulating a plastic or waste approach in their earnings calls.” This means that AXA IM analysts are using programs that can parse through company reports and identify keywords and expressions that are consistent plastics and waste management activities. The fund also uses external and internal data (including AXA IM qualitative SDG insights) to measure the positive contributions of the companies to SDG 12.
Getting Ahead of Regulators and Consumer
“We expect the next few years to be pivotal in plastics pollution mitigation driven by both government regulation and changing end-consumer preference. These structural trends are likely to drive significant growth in segments of the markets such as sustainable packaging and plastic recycling. As such its our view that companies that are facilitators or leaders in waste management and plastic-use are not only sustainable investments but could also be an attractive long term investment opportunity,” White added.
The new fund is or will be registered and available to professional and retail investors in Denmark, Finland, Norway, and Sweden. Outside of the Nordics, the fund is also available in Austria, Belgium,France, Germany, Italy (institutional only), Liechtenstein, Luxembourg, the Netherlands, Portugal, Spain, Switzerland and the United Kingdom.