MicrosoftTeams-image (16)

ESG Spotlight

Biodiversity in the Balance:
Hedging Portfolio Risks

Analyzing ESG integration in model consumer sector portfolio strategies

Investors have grown increasingly interested in addressing portfolio risks linked to biodiversity loss. Portfolio risks linked to biodiversity loss can stem from holding stocks in companies involved in land use changes for industrial production. Among the industries in our research coverage, automobiles, food retailers, textiles and apparel and household products companies are most exposed to controversies associated with biodiversity loss through their supply chains. 

Readers of this report will learn how:   
  • According to new research from Morningstar Sustainalytics, investing in companies facing high levels of risk associated with biodiversity loss could have a material effect on long-term portfolio performance.
  • A model portfolio investing in consumer goods stocks with lower material ESG issue (MEI) risk scores delivered a cumulative return of 51.1% over the past five years as compared to an 8.5% return for a similar, yet higher MEI risk portfolio.  

Download Report: