At AlbaCore, we focus on the long-term. As one of Europe’s leading alternative credit specialists, we invest in private capital solutions, opportunistic and dislocated credit, and structured products. 

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Specialist in Asia Pacific, China, India and South East Asia and Global Emerging Market equities.

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Our philosophy is very simple. We are constantly searching for high quality businesses and when we acquire them, we will work relentlessly with them to create long-term sustainable value through innovation, ESG-led and proactive asset management.

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formerly Realindex Investments

Leader in active quantitative equities across Australian equities, global equities, emerging markets and global small companies.

Backed by a unique blend of research, portfolio construction and risk management, focused on uncovering original insights and translating them into investment strategies that are active and systematic, aiming to generate alpha.

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Stewart Investors manage investment portfolios on behalf of our clients over the long term and have held shares in some companies for over 20 years. They launched their first investment strategy in 1988.

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Nature and biodiversity

Nature and biodiversity

Why is it important to us?

Nature and biodiversity matter to investors because the very companies we invest in not only impact, but truly depend on nature; yet we increasingly see a rapid loss of nature and biodiversity. Biodiversity conservation and climate action are intrinsically linked. As the planet’s best defence against climate change, it is important for investors to consider biodiversity and nature’s protection in meeting net zero targets and building a more climate resilient future.

Globally, there is a growing momentum to address biodiversity loss, which is becoming more tangible. At the UN Biodiversity Conference (COP-15) in December 2022, heads of States agreed to adopt the long-overdue Global Biodiversity Framework and its new targets and goals.

In line with the adopted targets, companies and financial institutions will increasingly be expected to assess and disclose nature-related risks, opportunities, dependencies and impacts in the near term, to deliver the Post-2020 Global Biodiversity Framework goals and targets.

Financial institutions have an important role, as providers of capital, to mobilise the necessary investment and opportunities for nature protection and restoration, and as regulated entities to monitor, assess and disclose nature-related risks, dependencies and impacts on nature across investment portfolios.

As long-term investors, we believe biodiversity loss and land degradation is financially material and addressing it is crucial to achieving a net zero and climate resilient future. Protecting nature is therefore in our own and our clients’ best interests.

Nature and biodiversity toolkit

Investors Can Access Nature Now (ICANN)

The unprecedented threats to nature and biodiversity, fundamental to our global economy and the fight against climate change is prompting investors to assess and disclose nature-related risks. To help investors start assessing nature, we have developed a guide that outlines a due diligence approach and resources, focusing on freshwater and forests.

What is First Sentier Investors doing?

In 2022, we convened a Nature and Biodiversity Working Group, comprised of members from nine of First Sentier Investors’ 15 investment teams1. A key output of this group was the delivery of a Nature and Biodiversity Toolkit launched in 2023, which provides a framework for assessing and engaging with investee companies on nature-related issues available to our investment teams. In 2023, we followed up on this work with the launch of a guide on these issues, to share our experiences and insights, and help to equip other investors with actionable tools on this topic. Investors Can Assess Nature Now (ICANN) is a guide for investors to better identify and assess materiality, exposure and responses to nature-related issues, to be used in company engagement and disclosure.

Other activity included the First Sentier MUFG Sustainable Investment Institute producing an engaging video that makes the case for protecting nature and explains how investors can take action. Two investment teams joined the investor engagement group on this issue, Nature Action 100.

We are also continuing to meet our requirements for the Finance for Biodiversity Pledge (FBP), an initiative calling for and committing to take ambitious action on biodiversity, as outlined in the table below.


1 There were 15 teams at the time First Sentier Investors convened the Nature and Biodiversity Working Group in 2022.

Investment team progress

Investment teams have been increasingly focused on nature and biodiversity, as demonstrated below.

Global Listed Infrastructure

The Global Listed Infrastructure team has identified the higher-risk sector exposures within its investable universe, using the TNFD priority list. These include the toll road, railroad, offshore wind and water utility sectors. The team has begun engaging with the companies in its portfolio to understand the monitoring systems, disclosures, policies and pledges they have in place, and is planning to expand these activities in the coming year.

Stewart Investors

Stewart Investors notes that when considering individual companies bottom-up, the team is focused on specific, tangible factors such as pollution, supply chains and plastic packaging, which feed into biodiversity outcomes and are more in the control of management than broad measures of natural capital. Further, the team explains that it is increasingly looking at the interconnectedness and dependencies between the issues outlined in this report. Its work on smallholder farmers is a good example of something that cuts across multiple issues, including biodiversity, climate change and human rights.

Global developments in biodiversity regulation

  • The French Energy-Climate Law Article 29 already requires companies and financial institutions to disclose biodiversity risks and impacts. France also became the first country in the world in 2020 to pass legislation requiring all new domestic washing machines to have a microfibre filter fitted, as standard, from the beginning of 2025.
  • ‘Biodiversity sensitive area’ and ‘emissions to water’ indicators in the Principal Adverse Impacts of the EU Sustainable Finance Disclosure Regulation (SFDR), which fund managers need to disclose for the targeted funds.
  • The European Union ban on imported goods that contributed to deforestation or produced in deforested lands. This new law will prevent the sale of products including beef, soy, and coffee linked to deforestation in the EU market.


Although these examples are European, we expect that there will be trickle-down effects from these regulations to other regions.

We aim to develop a firm-level approach to key nature-related topics and sector guidelines.

Reporting on progress

Sector materiality mapping

In order to understand the relationship between our investment holdings, and their pressure on nature loss, we used the Science Based Targets Network (SBTN)/United Nations Environmental Program (UNEP) World Conservation Monitoring Centre (WCMC) Sector Materiality Tool. The goal was to understand how, at a sector level, our portfolio holdings may be contributing to the pressures that cause environmental degradation and nature loss. This year we assessed listed equities, but plan to expand coverage over time.

The tool presents materiality ratings for 12 impact categories, themselves grouped by five nature-related issue areas: land/water/sea use change, resource exploitation, climate change, pollution and invasives, and other7. This tool has been recommended by TNFD for sector-level research and is in line with the Encore tool8, which provides information on the materiality of potential impacts on a sector level.

As an initial exercise, we used this tool on our listed equities teams’ holdings9 to understand which pressure/impact categories are more material. This tool only has data for direct operations and upstream operations (i.e. supplier) in the supply chain; downstream (i.e. customer) impacts could not be assessed at this stage. Additionally, although the tool uses International Standard Industrial Classification of All Economic Activities (ISIC), we mapped our holdings using the Global Industry Classification Standard (GICS) subindustries (which is less granular than ISIC), due to data availability issues10.

Using a 5-point system to translate the materiality scores of Very High (VH), High (H), Medium (M), Low (L) or Very Low (VL), we found that climate change, with a score of 4.0 (High materiality), has the highest weighted average materiality score of the 5 nature-related issues. Our analysis found this is partly due to a relatively high materiality score for climate change in general, and due to our exposure in certain sectors like metals, packaged foods and healthcare.

Figure 2. FSI weighted average scores for nature-related issues

Source: First Sentier Investors as at 31/12/22, SBTN Sector Materiality Tool 2022

In order to break down which of the impact categories we have the highest exposure to, we aggregated sector-level AUM with a materiality score of 4 or more for each impact category and compared the result for upstream supply chain and direct operations. We found that we have a relatively high investment exposure in sectors with high GHG emissions impact in the upstream, but for water and most other impact categories we have greater investments in sectors with impacts occurring at a direct-operation level.

Through this exercise we observed that the overall scores for upstream tend to be lower than direct operation impacts, hence causing the discrepancy in results. It also showed the importance of addressing pollution and waste issues as well as climate change and water.

Figure 3. FSI AUM (A$bn) with high materiality to nature-related pressures

Source: First Sentier Investors as at 31/12/22, SBTN Sector Materiality Tool 2022

7 As defined by Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES)

8 Exploring Natural Capital Opportunities, Risks and Exposure (Encore)

9 Of the US$88.8bn of AUM across the listed equities teams as at 31 December 2022, US$65.7bn, or 74%, is in GICS Subindustries that could be mapped to nature-related pressures using the Sector Materiality Tool. Thus our analysis is based on this level of coverage. In the next iteration we plan to cover fixed income security holdings

10 We are in the process of incorporating the ISIC data into our holdings data and will aim to update the analysis using the ISIC.

Table 2. Progress made under the Finance for Biodiversity Pledge

Commitment Progress made to date
Collaboration and knowledge sharing
  • Over the course of 2023, we joined more collaborative engagements and industry initiatives on nature and biodiversity, continuing our efforts made from the previous year
    • Microplastic pollution engagement lead (since 2020)
    • TNFD Forum member (2022)
    • Responsible Investment Association Australasia (RIAA)
    • Nature Working Group (2022)
    • Hong Kong Green Finance Association Biodiversity Working Group (2023)
    • Finance for Biodiversity Foundation Target Setting Working Group (2023)
    • Cambridge Institute for Sustainability Leadership (CISL)
    • Nature Positive Hub (2023)
    • ShareAction Biodiversity Hub member (2023)
    • Spring (PRI stewardship initiative on nature) endorser (2023)
    • Nature Action 100 investor participant (2023)
    • Mining 2030 supporter (2023)
  • Held multiple internal sessions to increase team members’ technical knowledge around nature and biodiversity
  • Published Investors Can Assess Nature Now guide and engaged with stakeholders on our framework and learnings.
Engaging with companies
  • Use of the Natural Capital and Biodiversity Toolkit for company engagements on freshwater and deforestation
  • Some investment teams have started identifying priority targets for engagement, collecting data and questions, following the engagement framework provided in the Toolkit.
Assessing impact
  • Conducted sector materiality and developed a heatmap across our listed holdings
  • Monitored biodiversity-related indicators in the SFDR Principal Adverse Impact
  • Engaged with various impact assessment service providers to start impact assessment.
Setting targets
  • Continued monitoring the development of the Science-Based Targets Network’s work on science-based targets for nature (land and freshwater)
  • Reviewed Nature Target Setting Framework for Asset Managers and Asset Owners published by Finance for Biodiversity Foundation in November 2023 and started exploring options for target setting.
Reporting publicly
  • Continued to report on progress in our annual RI Report and other specific reports where appropriate.

We aim to develop a firm-level approach to key nature-related topics and sector guidelines. This will be accompanied by monitoring, progress reporting, and our assessment of various nature-related commitments made by investee companies.

We will continue to develop our work on scoping assessments using the Taskforce on Nature-related Financial Disclosures (TNFD). This is a new risk management and disclosure framework that aims to enable organisations to report and act on evolving nature-related risks. Along with this work, we aim to equip our funds with the resources to report on nature-related disclosure criteria, such as the ‘biodiversity sensitive area’ or ‘emissions to water’ indicators in the Principal Adverse Impacts of the EU SFDR.


As a complex and interconnected issue, there are many challenges for investors.

We believe that assessing our exposure to water and deforestation, mapping various data points to our holding companies, assessing priority companies in depth, and engaging on material issues and gaps, can provide us new opportunities to understand our risk and dependency on nature. However, current data availability is patchy at best, and certain datasets are more accessible than others.

On a positive note, as more companies start to focus on this issue, there will be more opportunities for investors to assess nature-related risks, dependencies, and impacts. We believe improved disclosure is an important objective for company engagement, as this area continues to evolve.

Another challenge is approaching this topic in a more holistic way. Many financial institutions are already engaging with companies on other ESG issues like climate change or human rights. It is our view that biodiversity and nature issues, if not properly addressed, can exacerbate the existing problems, or if better handled, can provide solutions to other issues. This is especially relevant to deforestation issues, where nature loss, climate change and human rights abuse are often intricately linked in a certain biome or location.

Future plans

Since signing the Finance for Biodiversity Pledge in 2021, First Sentier Investors has been working towards delivering 5 actions by the end of 2024 (see Table 2). The most challenging parts for us are Step 3: assessing impacts; and Step 4: setting targets. Regarding impact assessment, we are speaking with various providers of biodiversity footprinting methodologies, to understand their approaches and decide on a way forward for the firm.

A starting point for assessing impacts includes reporting fund-level nature-related disclosure criteria, such as ‘biodiversity sensitive area’ and ‘emissions to water’ indicators as part of the Principal Adverse Impacts disclosure under the EU SFDR.

On target setting, we will continue monitoring the development of the Science-Based Targets Network’s work on providing guidance for financial institutions’ target setting approaches. Target setting will be largely based on the progress made in impact assessment, as it would help us understand the baseline.

Our other plans include taking part in collaborative engagements on deforestation; making updates to the Natural Capital and Biodiversity Toolkit; and continuing to take a leadership role on engaging with washing machine manufacturers and policy makers on the issue of microfiber pollution.

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