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Four ESG stocks focused on improving biodiversity What Investment

Impact Investing Forum 2024

London. April 24-25, 2023.

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Biodiversity is the variety of life on Earth. It encompasses plants, animals, insects and other organisms in land, ocean and freshwater ecosystems.

Unfortunately, it is under threat. In a 2019 UN report, scientists warned that 1m species – of an estimated total of 8m – face extinction, with changes in land use, climate change, pollution and hunting all playing a role.

A shocking statistic from reveals that, at present, we would require 1.6 planet Earths to maintain the world’s current living standards.

However, awareness is on the rise, and the desire to do more with the resources we have. Here are four stocks our Elite?-rated managers are backing to help tackle the threat.

Xylem Inc. (LSE:0M29)

Xylem is a US-based water infrastructure business that provides a number of different products and services. Its strapline is ‘Let’s solve water’ and the various brands in its portfolio are aimed at alleviating the challenges we face.

Co?manager of the BMO Responsible Global Equity Fund Nick Henderson says: “There is a huge runway of global growth for Xylem. Its Flygt brand provides de-watering products and services to address droughts and flooding? related issues.

“It also has a division called Census, with which Thames Water has a contract, to provide water-metering services. Its aim is that water is used more appropriately.”

Tetra Tech (NASDAQ:TTEK)

Global environmental company Tetra Tech provides consulting, engineering and construction management services in the areas of water, environment, infrastructure, resource management, energy and international development.

Artemis Positive Future Fund co-manager Jonathan Parsons says: ?The company is perfectly aligned with US president Joe Biden’s green agenda. This includes protecting water from disasters, conserving wetlands and developing green infrastructure.

“Under proposed legislation here in the UK any new infrastructure project must achieve biodiversity net gain. So we are pleased to continue to see increasing demand for Tetra Tech’s expertise.”

Christian Hansen Holding A/S (CPH:CHR)

Christian Hansen develops and produces ingredients for the food, pharmaceutical and agricultural industries.

It owns one of the world’s largest commercial collections of bacteria. This allows it to provide more sustainable food and agriculture alternatives by substituting chemical preservatives or pesticides with natural ones (enzymes and bacteria), thereby reducing chemical pollution.

Pictet Global Environmental Opportunities manager Luciano Diana says: “The company is driven by accelerating consumer demand for natural and differentiated products, as well as a growing focus on health and wellness globally.

“We like the company’s high market share based on its unique innovative products and wide economic moat.”

Smurfit Kappa (LSE:SKG)

Smurfit Kappa is a sustainable packaging and recycling business that aims to replace plastic packaging and minimise waste.

It’s a holding in the Liontrust Sustainable Future Managed Fund, and manager Peter Michaelis says: Smurfit Kappa is the number one cardboard box manufacturer in Europe. It benefits from the move away from plastic to recyclable and biodegradable packaging.

?As a leader in recycling, forest sustainability and efficiency in operations, we believe the company will deliver strong returns through the cycle. Over 75% of its card packaging is from recycled sources.”

Past performance is not a reliable guide to future returns. You may not get back the amount originally invested, and tax rules can change over time. The views expressed are those of the fund managers and do not constitute financial advice.

See also: The CleanTech revolution and the top four ways to invest in it – Cleantech investing is having a resurgence. Amanda O’Toole of AXA WF Framlington looks at what this means for investors and how they can best get into this market.



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