Impact Blog
Penguins, pollination and ... portfolios? How Responsible Investing ties into biodiversity

The views expressed in these posts are those of the authors and are current only through the date stated. These views are subject to change at any time based upon market or other conditions, and Calvert disclaims any responsibility to update such views. These views may not be relied upon as investment advice and, because investment decisions for Calvert are based on many factors, may not be relied upon as an indication of trading intent on behalf of any Calvert fund. References to individual companies for Engagement or Research purposes are provided for illustrative purposes only and may not be representative of the results of all of Calvert’s engagement efforts. The discussion herein is general in nature and is provided for informational purposes only. There is no guarantee as to its accuracy or completeness. Past performance is no guarantee of future results.

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      By Anthony Eames, Director of Responsible Investment Strategy, Calvert Research and Management

      Washington -Imagine our world without dolphins, penguins, tigers or elephants - or pollinating bees or ocean coral. Many species of these animals are on the World Wildlife Fund's (WWF) critically endangered list.1

      National Endangered Species Day is May 17, a time for reflecting on the intricate web of life on our planet, and what vanishing species might mean for human welfare. Fortunately, using environmental, social and governance (ESG) strategies, investors can join others working to preserve biodiversity.

      In just over 40 years, we've seen a 60% decline in the populations of mammals, birds, fish and reptiles, according to the WWF's Living Planet Report 2018.2 A loss of biodiversity has far-reaching, material impacts on not only ecosystems, but commerce, food sources and industry as well. It's also an economic and security issue as countries compete for scarcer resources.

      Calvert Blog 5-17-a

      Far-reaching impacts

      More than 1 million species may face extinction over the next two decades, according to a recent, groundbreaking United Nations (U.N.) report.3

      The top threats are clearly linked to human activities, according to both the U.N. and WWF reports. Farming, overfishing and urbanization - and the deforestation, resource redistribution, carbon emissions and pollution that often come with them - have caused the habitats of many mammals, birds, insects, fish and plants to shift, shrink or disappear.

      A deep ESG dive with Responsible Investing

      Investors concerned about wildlife and habitats can consider Responsible Investing strategies as a way to incorporate those concerns into their portfolios. At Calvert, not only are our strategies ESG-focused, we consider advocacy, proxy voting and reporting financially material portfolio ESG metrics to be essential components of Responsible Investing - and critical for our shareholders.

      Our proprietary research system is unique in its depth and breadth. Calvert's diverse set of ESG data sources is a key differentiator in the industry. We source raw ESG data from a variety of vendors, including ISS, MSCI, Rep Risk and Sustainalytics, and apply our own lens to assess company information.

      We review a company's environmental impacts and policies - as well as those of its supply chains - in terms of an overall industry context. Our exposure to certain industries is limited because of their inherent ESG risks that provide little opportunity for companies to shift their business models.

      Metrics that matter

      We believe that investors should be able to see the ESG impacts of their portfolios. We think this type of reporting is the next major step in the ongoing evolution of ESG investing.

      Our Impact Tool reports on seven key metrics, including many related to the environment, which have a direct impact on the endangerment of species. These metrics include carbon emissions, climate change, landfill waste, toxic emissions and water usage. The Impact Tool shows ESG metrics for certain Calvert portfolios compared to a benchmark index. We believe this type of transparency and information flow can help drive needed change.

      Calvert Blog 5-7-19b

      Advocating on the climate and animal welfare Engaging with companies to influence change at both the corporate and industry level is another essential tool. Our corporate engagement agenda has long focused on areas like climate change, greenhouse gas (GHG) emissions, water conservation and development of renewable energy sources, among others. In our Impact Tool, we display Calvert's proxy-voting record on proposals related to climate change.

      Calvert Blog 5-17-19c

      Calvert voted in support of animal welfare and animal-related product safety shareholder resolutions 100% of the time over the last three years/proxy-voting seasons.

      Our track record in responsible proxy voting shows our differentiated approach - we do not routinely vote with company management as many other asset managers do. We also work with other investors and coalitions, like Ceres, a sustainability nonprofit organization, to tackle challenges like climate change, water scarcity and pollution by setting greenhouse gas (GHG) reduction goals and other measures with companies.

      Bottom line: A loss of biodiversity has far-reaching, material impacts on commerce, food and industry as well as ecosystems. At Calvert, not only are our strategies ESG-focused, we also use advocacy, proxy voting and disclosure of portfolio ESG metrics to help address sustainability issues.