Taking root

Without plants, life on earth simply couldn't survive. Forests cover 30% of the planet, providing clean air, water and habitats for all life. And plants make up 80% of human diets while agriculture provides livelihoods for 2.6 billion people.

But human activity, such as deforestation, unsustainable agriculture and pesticide use, is destroying plants and wildlife worldwide. Humans are clearing 13 million hectares of forests each year. And the world is losing 12 million hectares of land annually through unsustainable use – equating to 20 million tonnes of lost grain.

What can the world do to halt the destruction? There is a ray of hope. And it comes from investors.

The United Nations (UN) wants to protect, restore and promote our planet's plants, insects and animals. It's doing this through Sustainable Development Goal (SDG) 15 (Life On Land). This goal is all about managing forests sustainably, combatting desertification (where useful land becomes desert), reversing land degradation and stopping biodiversity loss.

To support SDG 15, companies can measure, manage and reduce their impact on land and ecosystems. And there's a lot that businesses, relying on the land (like extraction, forest and agriculture companies) can do to help. For example, they can commit to using land and forests sustainably, invest more in innovation and natural infrastructure, and source materials responsibly. Even better, all this can boost their bottom line.

Companies also face strict regulations on managing and disposing of waste – not just within their factory gates, but across their suppliers. Businesses that aren't already complying with the rules risk suffering big fines and damaged reputations.

There are many ways investors can put their money to work and encourage businesses and countries to do better for the planet. To build a sustainable investment portfolio, they can invest in companies and governments that do a good job of protecting life on land.

At UBS, we consider companies with good environmental and biodiversity management policies and systems; site closure and rehabilitation plans; and those that manage hazardous waste and limit toxic emissions. We also look at governments that manage their air and land resources well.

We include SDG 15 in a broad environmental topic: pollution and waste. This captures environment management, biodiversity management, used of recycled materials, air pollution, waste and hazardous waste management, and other toxic emissions.

Investors today have a wide choice of investment approaches that drive sustainability.

To build a sustainable investment portfolio, investors can look for companies and governments that manage these issues well. We look at companies that have good governance through environmental management policies and systems, reduce packaging, recycle materials, manage hazardous waste, limit toxic emissions, and governments that manage their air and land resources well.

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