December 12, 2019
Read key facts and figures from the latest publication from the AXA Research Fund: Biodiversity at Risk: preserving the natural world for our future.
In 2017 and 2018, economic losses from natural catastrophes together totaled more than $505 billion*. Less than half of these losses were insured.
Ecosystems, such as wetlands and coral reefs, help protect coastal areas against storm damage and flooding. By protecting natural capital, insurers can also protect local communities and businesses and, over time, reduce the impact of natural disaster-related claims.
“Awareness levels have gone up significantly. Hurricane Katrina was a shock – hurricane Sandy was another shock. Since then, there has been huge interest in what we can do to reduce vulnerability. Nature is definitely part of that question – and it will have to be a bigger part of the answer. The insurance industry can help by recognizing how nature reduces risk, design products to protect it and encourage investment in its restoration.” Mark Way, Global Coastal Risk and Resilience Director, The Nature Conservancy.
The Living Planet Index shows a decline of 60% in the population sizes of wildlife over the past four decades**; the index surveys the health of thousands of species and populations around the world.
As part of its overall strategy for biodiversity, AXA invests directly in natural ecosystems. In 2019, the Group announced the launch of a new ten-year ‘Climate and Biodiversity’ impact fund. It will invest up to €200 million for conservation of natural capital, resource efficiency and increasing the resilience of vulnerable communities.
“We really want to drive capital to the heart of the biodiversity challenge, in order to protect ecosystems and better promote biodiversity – this is what we are doing with the Climate and Biodiversity impact fund.” Shade Duffy, Director of Impact Management, AXA Investment Managers.
Seventy percent of drugs used to treat cancer are natural or synthetic products inspired by nature***. In addition, some 60% of the world’s population rely on traditional medicine, many of which are based on plants and herbs.
The decline in the natural world has serious implications for our health: the poorer quality and variety of our diets due to the reduction of existing crops and a weaker capacity of natural ecosystems to provide us with fresh air and clean water and the reduced availability of natural resources for our medicine – all have the potential to negatively affect our health with higher ensuing costs for the insurance business.
Implementing the UN SDGs by 2030 will cost an estimated $5-7 trillion. At the same time, achieving the goals could create $12 trillion in market opportunities and 380 million new jobs****.
Biodiversity is one of AXA’s key topics within AXA’s responsible investment approach, stemming from the essential role biodiversity plays for certain sectors and their potential impacts on nature itself, particularly food and agriculture, pharmaceuticals, mining and hydropower.
“Among companies, there is a growing interest in the biodiversity topic as it connects social and environmental issues, attracting a growing interest within society as a whole. A responsible investor must address this issue and show support for the SDGs. It is especially critical that companies take into account their supply chains. If you look at retail and food companies, this is where most risks and opportunities occur.” Julien Foll, Senior Responsible Investment Analyst, AXA Investment Managers
"We need more research and we have to work through both our insurance products and our investments to help companies adapt and make the transition to a more environmentally sustainable future." Céline Soubranne, Chief Corporate Responsibility Officer, AXA Group
More than 4 in 5 consumers feel strongly that companies should care for the environment – the figure rises to 85% among millennials*****.
Companies are increasingly recognizing the adverse impacts resulting from biodiversity decline (e.g. risks to their operations and supply chains, liability, regulatory, reputational and financial risks) and the opportunities (e.g. sustainable business models, cost savings and improved relations with stakeholders).
“For a long time, the role of nature in combating climate change has been underestimated by society. That is now starting to shift. It is impossible to adequately tackle climate change without addressing biodiversity and ecosystem loss. Ultimately by conserving nature and restoring ecosystems we reduce vulnerability and increase resilience – the essence of our purpose as an insurer.” Suzanne Scatliffe, Corporate Social Responsibility Director, AXA XL
“Biodiversity loss has clear connections with AXA’s business. What is happening is a wake-up call. Everyone knows the situation is serious and it is now time to come up with solutions. We need more research and we have to work through both our insurance products and our investments to help companies adapt and make the transition to a more environmentally sustainable future.” Céline Soubranne, Chief Corporate Responsibility Officer, AXA Group
Find out more in Biodiversity at Risk, the latest in the AXA Research Guide Series from the AXA Research Fund.