Corner Office Views | Q1 2023
Biodiversity Investing in Europe
More emphasis in 2023
- 57% of surveyed European asset owners plan to invest in broad thematic ESG strategies with a biodiversity focus in the next 12 to 24 months; 49% of asset managers plan to launch such strategies.
- Cerulli has identified 13 biodiversity equity funds in the European fund market. More than half of these funds were launched last year and received more than €600 million (US$730 million) from investors.
- One of the most critical biodiversity issues for the managers we surveyed across Europe is the lack of appropriate asset and company-specific data.
Wouter Bakker, CFA
Wouter is a Senior Analyst on the European Institutional Asset Management team, providing quantitative and qualitative research for Cerulli’s European research products.
Prior to joining Cerulli, Wouter worked at Euronext, where he served as a Product Manager covering investment funds. He also previously worked as a Product Specialist at Candriam and Vanguard Asset Management.
Full biography here.
Cerulli expects both asset managers and asset owners to put more emphasis on biodiversity in 2023, after COP27 highlighted that without protecting and restoring nature there is no feasible way to limiting global warming. More than half of the European asset owners Cerulli surveyed currently do not have a biodiversity policy in place, but 40% plan to develop one in the next two years.
Asset managers in Europe are currently more committed to protecting nature and ecosystems: 86% of the managers we surveyed have a policy on biodiversity at present and 12% will implement one in the next two years.
Biodiversity-themed equity strategies
We believe the market for biodiversity-themed equity strategies will grow significantly over the coming years. Our survey of European asset owners found that 57% of respondents plan to invest in broad thematic environmental, social, and governance (ESG) strategies with a biodiversity focus in the next 12 to 24 months and our survey of asset managers found that 49% of respondents plan to launch such strategies.
Cerulli has identified 13 biodiversity equity funds in the European fund market. More than half of these funds were launched last year and received more than €600 million (US$730 million) from investors. Some asset managers we spoke to confirmed that asset flows have come mainly from retail investors, including banks and family offices. We expect the market for biodiversity-themed equity products to grow substantially, because most of the European asset owners we surveyed intend to invest in broad thematic ESG strategies with a focus on biodiversity in the next two years. For example, 70% of institutional investor respondents in Italy and the UK plan to allocate to such strategies over this period.