Root and branch: a case study in assessing portfolio biodiversity risk – AllianceBernstein

Water risk emerges as the top biodiversity threat in an analysis of a client portfolio. AllianceBernstein are not surprised.

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... Biodiversity risk is more nuanced and complex than many investors think. For instance, there is a widespread belief that deforestation poses the biggest nature-related risk for most portfolios, but when AllianceBernstein applied their proprietary biodiversity risk-assessment framework for a client, the company found that water risk, not deforestation, was the portfolio’s biggest exposure.

AllianceBernstein's analysis of the MSCI All Country World Index (ACWI) using the same framework shows water risk is elevated for many companies, highlighting just how important it is to assess biodiversity risk accurately.

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