16 November 2020
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Lombard Odier today announced the launch of a Natural Capital programme in the UK, in what the company described as a first-of-its-kind strategy.
Natural Capital will target investment opportunities that accelerate the transformation towards a circular bioeconomy and a leaner form of industry.
For the first time, there is the opportunity to invest in public companies that leverage the regenerative power of nature; Natural Capital. We believe these companies will deliver strong growth and become the winners of the future.
If we are to drive global economic growth, it is imperative that we value and invest in our natural capital."
The Natural Capital strategy is a global equity fund, which is directly inspired by the Prince of Wales and developed in partnership with the Circular Bioeconomy Alliance, established under his Sustainable Markets Initiative. The Circular Bioeconomy Alliance, of which Lombard Odier is a founding member, aims to drive transformational change to a climate and nature positive economy by connecting investors to sustainable investable solutions.
Lombard Odier said this morning "nature is the most productive asset of our economy. We rely on nature directly and indirectly across multiple sectors, including healthcare, agriculture, industrials, tourism and real estate. With eight billion people on the planet, our linear take-make-waste economic model is now dangerously depleting this most productive asset, despite its regenerative nature. This is a risk for our global economic activity."
However, powerful forces are now pushing for this outdated linear model to evolve into a new circular economy that is harnessing the power of nature on the one hand, and preserving it on the other. Harnessing the power of nature is about greater reliance on bio-materials and an increased take-up of nature-based materials. It is also about using waste as a resource, about bioenergy, and a variety of regenerative farming, forestry and fishery practices.
Preserving nature means shifting towards greater circularity in our production and consumption model as well as eliminating waste in our industrial activities. This is about creating a much leaner form of industry, or in other words about more efficient use of resources, a shift in our consumption model and about zero waste strategies.
This profound metamorphosis of our linear economic framework into a new circular model is first and foremost driven by value creation and better economics. The Natural Capital strategy, together with our Climate Transition strategy launched earlier this year, aims to support a move to a CLIC (Circular, Lean, Inclusive and Clean) economic model.
The high-conviction portfolio of 40-50 companies explicitly focuses on the hotbed of innovation in publicly listed, small to mid-sized companies in North America, Europe and Asia. The strategy is focused on identifying companies that are already profitable and well positioned to take advantage of these four unstoppable growth opportunities: the circular bio-economy, resource efficiency, outcome orientated consumption and zero waste.
Lombard Odier Investment Managers manages the Natural Capital strategy and will also provide investors with a sustainability report to show the positive impact on nature that investment in these companies brings to society and the planet, and to report on stewardship progress across the portfolio.
The Prince of Wales commented: "We need to accelerate our efforts and set the course for a sustainable future rooted in a new economic model - in other words, a circular bioeconomy that puts Nature and the restoration of Natural Capital at the centre of the entire process. Building a sustainable future is, in fact, the growth story of our time. If we are to drive global economic growth, it is imperative that we value and invest in our natural capital."
"This is why I am enormously encouraged to see that, under my Sustainable Markets Initiative, the Circular Bioeconomy Alliance is working hand-in-hand to support the Natural Capital Strategy developed by Lombard Odier."
Hubert Keller, Managing Partner of Lombard Odier Group and CEO of Lombard Odier IM, said: "The investment industry, which represents $120trn of capital, will always seek returns as a primary objective. Today some of the most convincing returns opportunities lie in the transition to a more sustainable economic model, putting climate transition and nature centre stage.
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