US-based Principal Asset Management (AM) has launched the Global Sustainable Food and Biodiversity Fund, bolstering its commitment to provide thematic products that meet market demand. The fund, classified as Article 9 under the EU’s Sustainable Finance Disclosure Regulation, aims to offer capital growth through investments in companies committed to sustainable agriculture and food security. Aimed at both institutional and retail investors globally, the vehicle will use fundamental research and a proprietary Sustainable Development Goals (SDGs) alignment tool to target companies engaged in the pursuit of SDGs including ‘Zero Hunger’, ‘Good Health and Wellbeing’, ‘Clean Water and Sanitisation’ and ‘Responsible Consumption and Production’. In addition, approximately 80% of the fund’s portfolio holdings will be invested in companies seeking to target biodiversity impact through their solutions or business policies. With the world’s population projected to reach 10 billion by 2050, approximately 56% more food will be required to sustain that growth, Principal AM noted. Increasing demand for sustainable food and biodiversity and growth in agritech also mean the fund will seek to accelerate investment potential in those sectors while lowering environmental impact. “We believe sustainable food production is the most credible path to improving biodiversity,” said Martin Slipsager Frandsen, Global Equities Portfolio Manager at Principal AM. “With agriculture remaining the most biodiversity-exposed sector, it holds the greatest potential for impact and we believe current demand for biodiversity will lead to great investment opportunities.”
