As the first asset manager worldwide to measure the biodiversity footprint of its funds, ASN Impact Investors’ main focus is on restoring nature. CEO San Lie challenges other asset managers to do the same
- CEO ASN Impact Investors, March 2022-present
- Head of portfolio management ASN Impact Investors, 2019-2022
- Managing director WestBay Investment Consultancy, 2016-2019
- Director of research Morningstar Benelux, 2011-2016
- Global project and integration manager Fortis Mees Pierson, 2006-2009
- Head investment advice & strategy ABN AMRO, 2002-2006
Investing in the Aqua-Spark fund, that aims to make aquaculture more sustainable. Or in the Black Rhino Bond, the world’s first bond to conserve and protect endangered species and their environment. These are just two of the recent investments of ASN Impact Investors’ Biodiversity Fund, which was launched at the end of last year.
The new fund is Euronext-listed and mainly focuses on sustainable forestry, agroforestry, sustainable seas and fisheries, and ecotourism. Its aim is to contribute to the protection and restoration of nature, by investing in projects and initiatives that make a measurable positive contribution to biodiversity.
“The Biodiversity Fund attracts a lot of interest, in the Netherlands and internationally”, says San Lie. Until recently the new CEO of ASN Impact Investors was not a specialist in the field of biodiversity, he acknowledges, but he is “pretty amazed” at the opportunities in this field.
“The market is still small. The leading players in this field are often not listed on the stock exchange. But their growth potential is enormous and with our money they are helping to build the economy of the future,” he says.
In 2018, the Dutch ASN Bank was the first bank globally to formulate the ambitious goal of realising a net positive effect on biodiversity as a result of all its loans and investments by 2030.
For ASN Impact Investors, this meant the need to screen all assets based on their effect on biodiversity. Lie explains: “Only then you will know what the negative impact of your investments is, and you can determine what needs to be done to restore it. As a result, we know how many hectares of nature we have to restore in order to arrive at zero on balance, and ultimately even positive.”
Partnerships with like-minded investors
In addition to the biodiversity targets, ASN Impact Investors also aims to make positive contributions by 2030 in the fields of climate change and human rights, with a particular focus on living wage.
At the end of last year the asset manager managed €4.7bn. Which is nice, but not enough, says Lie. “We have set very ambitious targets for ourselves. But it’s not only about ourselves but about the broader impact we have.”
One of the priorities for the new CEO is to build a stronger network. “We need partnerships with like-minded investors, institutional ones, like pension funds. We recently had a number of very interesting calls with several of them. They want to achieve more impact. And because of our name and track record, they are knocking on our door. The same applies to semi-institutional clients, whether it’s charities, congregations, etc.”
ASN Impact Investors is also looking for more partnerships with scientific institutions, such as universities, especially regarding data collection.
As initiator of the Partnership for Carbon Accounting Financials (PCAF) as well as the Partnership for Biodiversity Accounting Financials (PBAF), the firm is “aware of the need of better data showing the negative impact you have with your investments. Having these data is the bottom line, which you then can use to track what can be done to turn it into a positive impact”.
Lie, who in 2016 was co-responsible for the development and rollout of the Morningstar Sustainability Ratings, is critical about the recent rapid growth of sustainable or impact funds.
“A lot of them are just window-dressing. The name of the fund is changed, but nothing has changed in the investment policy, except maybe a handful exclusions. Many asset managers don’t have a clue. They don’t do this deep dive that you would hope they would do.”
“Truly sustainable investments focus on ‘recovery”, Lie argues. “As an investment industry, we need to take responsibility by contributing to the transition that is necessary.” The EU’s new SFDR legislation is potentially a big step forward. “From next year on this may have a positive impact, and diminish the greenwashing.”
According to the SFDR regulations, the funds of ASN Impact Investors fall into the dark green category, meaning they belong to the highest category and encourage sustainable progress.
“My mission is to broaden the awareness that the whole investment community has the responsibility to act now. Investing in a different way can be done, there are many attractive opportunities to do so. It’s time to act now.”San Lie, ASN Impact Investors
According to Lie, this is not accurate anymore. “Even Article 9/dark green funds can have a negative impact on climate and biodiversity. A new category should be created, with funds that invest in nature restoration that actually reduces CO2 emissions and really increases biodiversity. In fact, you can only call such funds dark green.”
Investors really have to step up their ambition, Lie says. “Whether it’s banks, asset managers or companies, everybody is now talking about net positive in 2050. But at that time most of us will be dead, or retired. So it’s too easy to make these promises. You actually leave the problem for the next generation to solve. So that’s why we are reaching out to other investors, trying to share our experiences, to also make them aware that it’s possible to reach these ambitious goals in 2030.”
The financial sector is known to be mostly conservative, and risk-averse. Lie concludes: “I come from that world, and I understand this. But with the challenges that we have ahead of us, that won’t bring us anywhere. My mission is to broaden the awareness that the whole investment community has the responsibility to act now. Investing in a different way can be done, there are many attractive opportunities to do so. It’s time to act now.”