Investing in the natural capital transition
Biodiversity loss is one of the greatest sustainability issues of our time. The natural world – defined as all living things, air, water, geology, and soil – supports our whole existence, with over half of GDP dependent on them. 1 Despite this, 14 out of the 18 ecosystem services are degraded or in decline.
We believe markets will increasingly price in the costs and opportunities of addressing natural capital depletion. The World Economic Forum estimates the transition to a nature-positive economy, with critical shifts in land, oceans, infrastructure and energy, could deliver an estimated $10 trillion of business opportunities and 395 million jobs by 2030.2
Our Natural Capital Transition Global Equity strategy targets opportunities aligned to the principles of the United Nations’ Sustainable Development Goals (see below specific SDGs) that support and benefit from the transition to a nature-positive economy. We invest with an active, high-conviction approach to address the needs of investors seeking two objectives:
Long-term capital growth
To support the transition to a nature-positive economy
Investment opportunities in the strategy are linked to the following investment themes and aligned with the principles of the following United Nations Sustainable Development Goals:
Circular economy
Climate action
Sustainable ocean
Sustainable land
Our approach
We go beyond a simple approach of only investing in companies providing solutions to reduce human impact on nature, to instead also invest in companies transitioning their business models towards a nature-positive economy. Moreover, we seek to drive further positive change by engaging with investee companies on specific biodiversity issues.
Transition focus
Our proprietary transition risk framework helps identify winners from the natural capital transition across all sectors. Our approach aims to deliver more resilient performance over the long term, uncover more alpha opportunities, and more effectively support the natural capital transition than by investing in solutions-focused companies alone.
Bespoke engagement
We engage with all portfolio companies on specific social issues. Our three-year structured engagement programme systematically tracks all companies with an escalation pathway that could ultimately lead to divestment if we are not satisfied with their progress.
Natural Capital Transition Global Equity strategy
Aviva Investors Natural Capital Transition Global Equity Fund
This strategy aims to deliver long-term capital growth by investing in companies globally that either provide solutions to reduce biodiversity loss or are transitioning their business models to manage their impact on nature, while avoiding those that do not meet minimum environmental criteria.
Evidencing how we are progressing against our sustainable outcomes objective
This report looks at the progress the fund has made in 2022, in delivering tangible sustainable outcomes for clients, across the companies invested in as well as through company engagement and macro stewardship.
Natural Capital Transition Global Equity: Strategy in brief
We invest in global equities of solutions companies whose products or services reduce human impact on nature, or transition companies who are leading their sector in reducing their own impacts on nature.
Key risks
Full information on the risks applicable to the Fund is detailed in the KIID and Prospectus.
Investment risk and currency risk
The value of an investment and any income from it can go down as well as up and can fluctuate in response to changes in currency and exchange rates. Investors may not get back the original amount invested.
Equities risk
Equities can lose value rapidly, can remain at low prices indefinitely, and generally involve higher risks — especially market risk — than bonds or money market instruments. Bankruptcy or other financial restructuring can cause the issuer's equities to lose most or all of their value.
Counterparty risk
The fund could lose money if an entity with which it does business becomes unwilling or is unable to meet its obligations to the Fund.
Illiquid securities risk
Certain assets held in the fund could, by nature, be hard to value or to sell at a desired time or at a price considered to be fair (especially in large quantities), and as a result their prices could be very volatile.
Derivatives risk
Derivatives are instruments that can be complex and highly volatile, have some degree of unpredictability (especially in unusual market conditions), and can create losses significantly greater than the cost of the derivative itself.
Sustainability risk
The level of sustainability risk to which the fund is exposed, and therefore the value of its investments, may fluctuate depending on the investment opportunities identified by the investment manager.
Strategies in focus
Sustainable transition
A range of strategies investing in opportunities to accelerate change for Climate, People and Earth.
Natural Capital Transition Global Equity team
Jonathan Toub
Portfolio Manager, Global Equities
Julie Zhuang
Portfolio Manager, Global Equities
Need more information?
For further information, please contact our investment sales team.
Our views
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The tipping point for climate finance: Making financial flows consistent with the Paris Agreement
29 Nov 2023
Transition plans, including from governments in response to the Global Stocktake, will be crucial to bring about the shift to a low-emissions, climate-resilient world. Markets need clear implementation signals to align capital with the goals of the Paris Agreement. Our in-depth report calls for the creation of a transition-plan ecosystem connecting all levels of the global economy.
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Deals delayed and crowded trades…But investors can still find value in infrastructure debt
4 Sep 2023
Private infrastructure debt still offers a broad spectrum of opportunities, but investors face complex challenges. In this Q&A, our infrastructure debt team contemplate the current state of the market and where it goes from here.
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Tipping points and transformation: Getting on the right side of change
16 Aug 2023
Rapid changes in the global economy could tip some sectors into low-carbon phases faster than incumbents expect, with important investment implications.
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Charging up: Batteries and the fight against climate change
5 Jan 2023
Batteries are set to play a crucial role in helping to decarbonise the global transport and energy sectors. As capital floods into an industry experiencing exponential growth, we look at the key considerations for investors.
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Confronting a permacrisis? The intersection between antimicrobial resistance, climate change and biodiversity loss
23 Nov 2022
Will a warmer and less biodiverse world give pathogens new opportunities, and do we have the tools to confront disease? This report discusses the complex intersection of three planetary crises and calls for urgent action to slow resistance to antimicrobial drugs – an obvious public health emergency.
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Deep water: Ten threats to marine ecosystems
8 Jun 2022
Our air, weather, food, the health of diverse marine life and millions of jobs all depend on the ocean. But we have not done well as custodians of marine ecosystems. Here, we set out ten ways where human actions threaten the health of an essential environment.
Explore our equities range
1. SwissRe Biodiversity and Ecosystem Services (BES) 2020. IPBES (2019) Global assessment of the status of biodiversity and ecosystems. Planetary boundaries: Stockholm Resilience Centre. Ecology ecosystem services.
2. New Nature Economy Report II: The Future of Nature and Business', World Economic Forum, July 14, 2020.