Sustainable finance

Biodiversity, Arca Fondi Sgr creates a rating and launches a specialised fund

It is the National Biodiversity Protection Index that scores states. The Arca Obg fund is the first European government bond in the sector

by Vitaliano D'Angerio

Le api sono un fattore chiave per la tutela della biodiversità

2' min read

Translated by AI
Versione italiana

2' min read

Translated by AI
Versione italiana

Invest in bonds of the most biodiversity-friendly states. It is now possible thanks to an index developed by Arca Fondi Sgr's financial models research team. It is the National Biodiversity Protection Index (Nbpi), which assigns a biodiversity rating to government bonds: it ranges from triple C, the lowest, to triple A assigned to countries that possess great biodiversity and implement initiatives to protect it. Italy has a triple B and ranks 29th out of 38 European countries; globally, it ranks 74th out of 147 countries.

On the occasion of the presentation of the index, Arca Fondi also launched the first European government bond fund dedicated precisely to the protection of biodiversity: it is the Arca Ogb, Article 9 on the basis of the European Esg regulation. It has a target fund size of EUR 100 million over the next 12 months, o.80% management fee and distributes the income generated each year.

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BIODIVERSITÀ, LA CLASSIFICA DEI PAESI EUROPEI

Il rating di tutela della biodiversità elaborato da Arca fondi Sgr

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How the index works

The biodiversity protection index allows for a synthetic score based on three key dimensions:

1) Stock, the measure of species richness and variety of ecosystems;

2) Pressure, which analyses environmental pressures and threats to biodiversity;

3) Response, which evaluates the safeguard policies and strategies adopted.

So if the first dimension relates to the biodiversity that already exists in that country, the other two points concern the risks to the ecosystem and the actions put in place by states to defend it. "We elaborated the index on the basis of funds such as World Bank, Fao, documents from Yale and Oxford," explains Lorenzo Viola, who developed the methodology together with Ludovica Ravelli. The method is open source and can be found on the international database Ssrn.

"On the basis of our index," points out Riccardo Ceretti, chief innovation officer of Arca Fondi Sgr, "the Arca Obg fund cannot, for example, invest in Dutch government bonds, which have a double B+ rating. The securities to be included in Arca Ogb's portfolio must in fact have a biodiversity rating of at least triple B-.

Controcorrente

Arca Fondi Sgr is therefore going against the tide with respect to what some large American management companies in particular are doing. In fact, the launch of the biodiversity fund comes in an anti-green phase that has the United States as its spearhead. 'We started in 2019 to launch Esg products,' Ceretti reiterates. 'The Arca Government Bond Biodiversity is just the latest in a long series. As proof that we believe in sustainability, there is our net inflows of 3 billion this year made up almost entirely of Esg funds. Not only that. The growth in assets from 2022 to date, again in the Esg area, has been 120% and currently almost 32% of our assets have these characteristics'.

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