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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