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COP15: Investors attend the United Nations Nature Summit for the first time

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Geopolitical disagreements over a proposed new global nature conservation fund have stymied an agreement at the United Nations’ Global Biodiversity Summit in Montreal, but the COP15 event has attracted a new group: investors.

Unlike its more mature cousin, the UN COP27 Last month’s climate summit in Egypt, the Conference of the Parties to the United Nations Convention on Biological Diversity did not usually attract fund managers and business leaders.

But the rising value of natural capital in the world Climate change Forced action across government and industry, combined with a growing understanding of the growing risks to their companies from declining natural resources, has drawn a wider audience to the congregation in Canada.

The strong level of interest from investors was “fresh,” said Adam Kanzer, head of oversight at BNP Paribas Asset Management in the US. “Very few investors and very few companies” were previously talking about biodiversity, he said.

“It’s hard to talk about the importance of this issue without the person sounding crazy, like a guy in the street holding a sign that says the end of the world is near — and you tend to tune in to these people. But the data is really terrifying.”

Several investors said it was their first time attending a biodiversity conference. “I think that applies to the vast majority of investors that I meet here,” said Pieter van der Werff, Dutch asset manager Robico, speaking from Montreal, as Summit has been moved from China due to Covid-19.

The World Economic Forum estimated in a 2020 report that more than half of global GDP, or about $44 trillion, is “moderately or significantly dependent on nature.” The World Economic Forum report highlighted that construction, agriculture, and food and beverages are the sectors most dependent on nature.

Chinese President Xi Jinping delivers a video speech at the COP15 Biodiversity Conference
Chinese President Xi Jinping delivers a video address at the opening of the high-level segment of the COP15 Conference on Biological Diversity © AP

The United Nations scientific body on nature, known as the Intergovernmental Platform on Biodiversity and Ecosystem Services, is on site 2019 assessment Millions of animal and plant species are at risk of extinction. It has also estimated that about three-quarters of food crops that depend on animal pollination are at risk.

“It’s not just something horrible happening to the environment, but it’s a financial risk,” Kanzer said. “As confidants, I feel we have an obligation to take care of this.”

Montreal negotiators are trying to crack down on the so-called “Paris Agreement for Nature,” which consists of a series of national commitments to reverse the damage humans are doing to the natural world.

The talks ran into trouble in the middle of the week after the withdrawal of an African group of 54 countries and several countries in South and Latin America, as well as India and Indonesia, due to the failure of rich countries to provide funding for nature conservation. Negotiations resumed with more than 100 environment ministers arriving in Montreal by the end of the week.

Japan, the European Union, Norway, Switzerland and France are said to be among those countries opposing the creation of a new fund. The COP15 talks are due to conclude by Monday but are widely expected to take additional time due to the division among the countries.

Chinese President Xi Jinping, whose country holds the presidency this year, urged countries to work together to promote “harmonious coexistence between man and nature,” in a statement. Address by video link Thursday.

A new frame will replace the so-called Aichi Biodiversity Targets, which was first set in 2010 and named after Japan’s Aichi Prefecture. None of these goals has been fully achieved yet.

An important item on Montreal’s agenda is whether to require companies to assess and report their dependence on biodiversity – a proposal likely to be implemented by the Nature Financial Disclosures Task Force.

Robeco’s Van der Werf said disclosure from the companies was “crucial” to investors looking to invest in sustainable production and reduced exposure to deforestation, among other things.

Sue Armstrong Brown, global director of environmental standards, said companies surveyed by the nonprofit CDP Group, which operates a voluntary disclosure system used by investors, were responding to new, high-level questions about biodiversity set in a recent survey.

About 7,700 companies out of more than 8,800 in the survey provided details. “The vast majority of companies responded without much fanfare,” Armstrong-Brown said. “And the numbers who were talking about biodiversity were much higher than the numbers who were taking actual action on the targets. This is the next step.”

In a recent report, Goldman Sachs said investing in nature could mean finding companies that contribute directly to conservation efforts, or by investing in companies that reduce or manage biodiversity risks.

Many companies will need to “shift” away from “a lot of the commodities and practices that we have . . . so we’re consuming less raw materials and extracting less,” said Mary Beth Gallagher, director of engagement at Domini Impact Investments.

“If we reduce the ecosystems we depend on for food, water and air purification, it will eventually affect our businesses. This has relevance across the entire economy.”

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We need to pay more attention to skewed economic signals

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The writer is chair of Queen’s College, Cambridge and advisor to Allianz and Gramercy

Inflation was the dominant economic and financial issue of 2022 for most countries around the world, especially for advanced economies that have a consequential impact on the global economy and markets.

The effects have been seen in declining living standards, increasing inequality, increasing borrowing costs, stock and bond market losses, and occasional financial mishaps (fortunately small and so far contained).

In this new year, recession, both actual and feared, has joined inflation in the driving seat of the global economy and is likely to replace it. It’s a development that makes the global economy and investment portfolios subject to a wide range of possible outcomes — something that a growing number of bond investors seem to be aware of more than their equity counterparts.

International Monetary Fund iYou will likely review soon Her economic growth forecasts again, predicting that “a third of the world will be hit by recession this year”. What is particularly notable to me about these worsening global prospects is not only that the world’s three major economic regions – China, the European Union and the United States – are slowing down together, but also that this is happening for different reasons.

In China, a chaotic exit from the wrong Covid-19 policy is undermining demand and causing more supply disruptions. Such headwinds to domestic and global economic well-being will continue as long as China fails to improve the coverage and effectiveness of its vaccination efforts. The strength and sustainability of the subsequent recovery will also require that the country more vigorously renew a growth model that can no longer rely on greater globalization.

The European Union continues to deal with energy supply disruptions as the Russian invasion of Ukraine continues. Strengthening inventory management and reorientation of energy supplies is well advanced in many countries. However, it is not yet sufficient to lift immediate constraints on growth, let alone resolve long-term structural headwinds.

The United States has the least problematic view. The headwinds to growth are due to the Fed’s struggle to contain inflation after mischaracterizing rate increases as fleeting and then initially being too timid to adjust monetary policy.

The Fed’s shift to an aggressive front-load of interest rate hikes came too late to prevent the spread of inflation in the services sector and wages. As such, inflation is likely to remain stubborn at around 4 percent, be less sensitive to interest rate policies and expose the economy to greater risk for accidents from additional policy errors that undermine growth.

The uncertainties facing each of these three economic areas suggest that analysts should be more careful in reassuring us that recessionary pressures will be “short and shallow”. They need to be open, if only to avoid repeating the mistake of prematurely dismissing inflation as transient.

This is especially important because these diverse drivers of recessionary risk make financial fragility more threatening and policy shifts more difficult, including potentially Japan. Get out of interest rate control Policy. The range of possible outcomes is extraordinarily large.

On the one hand, a better policy response, including improving the supply response and protecting the most vulnerable populations, can counteract the global economic slowdown and, in the case of the United States, avert a recession.

On the other hand, additional policy errors and market turmoil can lead to self-reinforcing vicious cycles with rising inflation and rising interest rates, weakening credit and compressed earnings, and stressing market performance.

Judging by market prices, more bond investors are better understanding this, including by refusing to follow the Fed’s interest rate guidance this year. Instead of a sustainable path to higher rates for 2023, they believe recessionary pressures will lead to cuts later this year. If true, government bonds would provide the yield and potential for badly missed portfolio risk mitigation in 2022.

However, parts of the stock market is still weakly bearish pricing. Reconciling these different scenarios is more important than investors. Without better alignment within markets and with policy signals, the positive economic and financial outcomes we all desire will be no less likely. They will also be challenged by the risk of more unpleasant outcomes at a time of less economic and human resilience.

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Macro hedge funds end 2022 higher, investors say, while many others take big losses By Reuters

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© Reuters. FILE PHOTO: Traders work on the trading floor of the New York Stock Exchange (NYSE) in New York City, US, January 5, 2023. REUTERS/Andrew Kelly

By Svea Herbst Baylis

NEW YORK (Reuters) – Some hedge funds betting on macroeconomic trends have boasted of double and even triple-digit gains for 2022, while other high-profile companies that have long been on technology stocks have suffered heavy losses in volatile markets, investors said.

Rokos Capital, run by Chris Rokos and one of a handful of so-called global macro companies, gained 51% last year. Fund investors this week, who asked not to be identified, said Brevan Howard Asset Management, the company where Rokos once worked, posted a gain of 20.14% and Caxton Associates returned 16.73%.

Haider Capital Management’s Haider Jupiter Fund rose 193%, an investor said.

Data from hedge fund research showed that many macro managers have avoided crumbling stock markets that have been rocked by rapid interest rate increases and geopolitical turmoil, including the war in Ukraine, to rank among the best performers in the hedge fund industry. The company’s macro index rose 14.2% while the general index of hedge funds fell 4.25%, its first loss since 2018.

Equity hedge funds, where the bulk of the industry’s roughly $3.7 trillion in assets are invested, fared worse with a loss of 10.4%, according to HFR data. And while that beat the broader stock market’s loss of 19.4%, some high-profile funds posted even bigger losses.

Tiger Global Management lost 56% while Whale Rock Capital Management ended the year with a 43% loss and Maverick Capital lost 23%. Coatue Management ended 2022 with a loss of 19%.

But not all companies that bet on technology stocks suffered. John Thaler JAT Capital finished the year with a 3.7% gain after fees after a 33% increase in 2021 and a 46% gain in 2020.

Sculptor Capital Management (NYSE::), where founder Dan Och is fighting the company’s current CEO in court over his salary increase, posted a 13% drop.

David Einhorn’s Greenlight Capital, which bet that Elon Musk would be forced to buy Twitter, ended the year up 37% while Rick Sandler’s Eminence Capital rose 7%.

A number of so-called multi-manager companies where teams of portfolio managers bet on a variety of sectors also boast positive returns and have been able to deliver on their promise that hedge funds can deliver better returns in distressed markets.

Balyasny’s Atlas Fund (NYSE: Enhanced) gained 9.7%, while Point72 Asset Management gained 10%. Millennium Management gained 12% while Carlson Capital ended the year with a 7% gain.

Representatives for the companies either did not respond to requests for comment or declined to comment.

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German automakers point to easing supply chain problems

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Sales at BMW and Mercedes-Benz jumped in the final months of 2022 as the German premium auto brands indicated supply chain problems plaguing the industry were abating.

Automakers around the world have experienced parts shortages since the pandemic, especially semiconductors, leaving many of them with large fleets of incomplete vehicles that can’t be delivered to customers.

BMW and Mercedes each said their full-year vehicle deliveries fell last year by 4.8 percent and 1 percent, respectively, due to Suppliers Bottlenecks as well as lockdowns in China and the war in Ukraine.

But supply pressures eased in the last quarter of the year, as BMW recorded a 10.6 percent jump in sales, with 651,798 vehicles delivered, and Mercedes fulfilling 540,800 orders, up 17 percent from the same period in 2022.

BMW He said the main effects of supply chain bottlenecks and continued lockdowns were felt in the first six months of the year, adding that “sales were steadily picking up in the second half.”

Mercedes boss Ula Kallenius told the Financial Times last week that the list of problems in the auto supply chain was declining, but added that long waits for cars would continue into 2023.

“One chip is enough to be vital [ . . .] Missing, and then you can’t finish the car, even if you have everything else.

Both brands recorded strong sales growth electric car. Mercedes, which last week announced a plan to build 10,000 charging docks, said EV shipments grew 124 percent to 117,800 last year compared with its predecessor.

Similarly, BMW reported strong growth in electric vehicle sales, with deliveries of fully electric vehicles doubling last year to 215,755.

Analysts at Bank of America said that sales of electric vehicles, including hybrid cars, reached a historic peak last November, with 1.1 million units sold. They attributed this largely to the upcoming phase-out of customer subsidies in Germany.

Participate in Mercedes BMW and BMW prices held steady Tuesday morning as investors priced in an image of an improving showing.

Rolls-Royce, a subsidiary of BMW, announced Monday that sales have hit a 119-year record, driven by strong demand in the United States, its largest market.

The luxury brand has been largely unaffected by the semiconductor pressure, mainly because it makes relatively few compounds and therefore needs fewer chips.

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