ASN Biodiversity Fund

Summary

The ASN Biodiversity Fund is the first listed fund for natural capital that uses investment from the retail sector. It targets large funds and listed companies that have a measurable positive impact on biodiversity and nature restoration through sectors such as agroforestry and sustainable fishery. For every €1 million invested, the Fund aims to help restore around 230 hectares of land or sea to a healthy ecological balance. Since its launch in November 2021, the Fund has amassed over €26 million from over 1 million retail investors.

In 2016, ASN Bank, a bank with a mission to promote sustainability in society, set itself an ambitious target to become a nature net-positive bank by 2030. That commitment led the bank to measure the biodiversity impact of its loan portfolio and investments every year.

Roel Nozeman, Senior Advisor Biodiversity, ASN Bank

It found that, although the sustainability bar is high for all the investment funds the bank manages through its investment arm, ASN Impact Investors, its impact was still negative on biodiversity, because even the most sustainable listed companies that it invested in typically have a net negative impact on biodiversity. “We realised that we needed to do something different to be able to invest in activities that contribute to restoration and to the protection of nature, so we did this study for almost two years to develop a new fund,” said Roel Nozeman, Senior Advisor, Biodiversity, at ASN Bank, on the GFI Hive podcast in May.

In November 2021, the ASN Biodiversity Fund was launched with €15 million of seed capital provided by Volksbank, the parent company of ASN Bank. The Fund is listed on Euronext.

Target sectors

The Fund focuses its investments in four sectors that have a large impact on natural capital through land use: sustainable forestry, sustainable forest agriculture, sustainable seas and fishing, and ecotourism. The aim is to invest in nature restoration projects that also create green jobs and support local communities.

Currently, the Fund is mostly investing in their projects through impact investment funds that specialise in nature conservation or restoration. However, it occasionally invests in the shares of listed companies when they can sufficiently demonstrate they have a net positive impact on biodiversity “When we developed the Fund, we also wanted to do direct equity investments in projects, but we had some discussions with the regulators in the Netherlands and that proved to be quite a big hurdle to get approval for at this point,” Nozeman said on the podcast. “Luckily, there are a lot of investment funds starting to provide a really good possibility to invest in a number of activities.”

Most of the Fund’s invested capital to date has gone to South America (34%) and Africa (33%), with Asia Pacific making up (15%), Europe (14%) and North America (4%).   The Fund’s top four investments are

• • eco.business Fund, a fund that supports sustainable business that contribute to biodiversity conservation
  • AquaSpark, a fund that invests in sustainable aquaculture
  • The Food Securities Fund, which provides working capital to agricultural companies that purchase products from small farmers in sub-Saharan Africa
  • Wide Open Agriculture

Wide Open Agriculture is an Australian company that markets products from regenerative agricultural entrepreneurs and farmers working on land restoration. It is one of the few listed companies the Fund invests in. The financial objective of the ASN Biodiversity Fund is a combination of long-term capital growth and a modest dividend yield. Its financial return is predicted between 3% and 4%. As of 15/7/22, its shares were trading at €24.90.

Measuring the sustainable return

Meanwhile, its sustainable return will be expressed in the number of hectares on land or on sea where the Fund protects and restores biodiversity. For every €1 million invested in the ASN Biodiversity Fund, ASN Impact Investors aims to restore around 230 hectares of land or sea to a healthy ecological balance.

For the annual measurement of the impact of the Fund in hectares, the Fund uses the Biodiversity Footprint for Financial Institutions (BFFI). This is a method developed by ASN Bank, CREM and PRé Sustainability to measure a financial institution’s progress on biodiversity. The Fund also adheres as much as possible to the Partnership for Biodiversity Accounting Financials (PBAF) standard.

Investor engagement

Since its launch last November, the ASN Biodiversity Fund has proved to be popular with retail investors, suggesting there is significant demand from those investors to invest in biodiversity. It has already amassed over €26 million in investment from over 1 million investors. Nozeman thinks that the participation of retail investors is important in order to protect and restore biodiversity around the world and that there is huge potential for more investment in this area. “

There was an article in Nature showing that we can still bend the curve of biodiversity loss in nature in the coming decades. We really feel it’s important for not only public funds, but also private funds to start contributing to these goals…Our Fund is a new addition to the field of investment funds that’s really trying to show that this is the way forward,” he said on the podcast.

Sources:

1. ASN Biodiversity Fund Fact Sheet
2. ‘Episode 21: Roel Nozeman, Senior Advisor Biodiversity, ASN Bank’, Financing Nature Podcast, May 2022
3. ASN Impact Investors website