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Ideas de inversión | Podcast - 13:18 MIN

Talking Heads – La necesidad de ofrecer soluciones a los problemas relacionados con el agua

Justin Winter
2 Autores - Ideas de inversión
10/07/2023 · 6 Min

A la hora de invertir en soluciones a los problemas relacionados con el agua debemos hacer frente a fenómenos de largo recorrido como el cambio climático. Justin Winter, el gestor senior y cogestor de la estrategia del agua, señala que su resolución costará miles de millones de dólares.   

En esta nueva edición del podcast Talking Heads, Justin ofrece a  Andrew Craig, codirector del equipo de contenidos de inversión, algunos ejemplos de problemas climáticos relacionados con la abundancia y escasez de agua. Durante su conversación abordarán también cuestiones como la relocalización de industrias estratégicas, como la fabricación de semiconductores, y la necesidad de grandes inversiones en, por ejemplo, instalaciones de reutilización del agua y agua ultrapura.

En opinión de Justin, para abordar la contaminación del suministro de agua por sustancias químicas perfluoroalquiladas o PFAS (también conocidas como «sustancias químicas eternas») se necesitará aumentar de forma notable el gasto en ciertas soluciones como el tratamiento del agua, los sistemas de filtración y los equipos de ensayo, lo que también podría favorecer el crecimiento a largo plazo de las empresas que proporcionan soluciones relacionadas con el agua.

También puedes escuchar el podcast y suscribirte a Talking Heads en YouTube.


Leer la transcripción

This is an edited transcript of the audio recording of this Talking heads podcast

Andrew Craig: Hello and welcome to the BNP Paribas Asset Management Talking Heads podcast. Every week, Talking Heads will bring you in-depth insights and analysis on the topics that really matter to investors. In this episode, we’ll be discussing investing in water and assets related to the provision of water. I’m Andy Craig, Co-head of the Investment Insights Centre, and I’m joined today by Justin Winter, Senior Portfolio Manager and Co-Portfolio Manager for the water strategy at Impax Asset Management. Welcome, Justin, and thanks for joining me.

Justin Winter: Thanks, Andy. It’s a pleasure to be back.

AC: A recent UN report confirmed continuously increasing demand for water, driven by the climate crisis, population growth and changing consumption patterns. This is putting huge pressure on water resources, with the number of people in cities facing water scarcity set to double to 2.4 billion in the coming decade. Clearly, this is a topic of great importance and potential for investors. The last time you joined us, we spoke about the impacts of climate change for investment. What notable developments have happened since then?

JW: The impact of climate change is still mounting. In Europe, we’ve had drought and water shortages, then floods in Italy. That is a characteristic of climate change – drought, then deluge, where warmer air holds more water leading to heavier rainfall. That will be with us for a long time.

Climate change has a continuing impact in terms of a water investment theme. One report last year by a group of consulting engineers estimated that between now and 2050 there will be USD 5.6 trillion worth of potential losses to global GDP. Water scarcity is a big part of that, but – apparently counter-intuitively – almost half of the losses is from storm water events. High intensity rainfall causes substantial economic damage and loss of life.

There is a lot of focus on water security in the US. In Arizona, Phoenix has stopped approving houses in parts of the city on concerns about the long-term viability of water supply. And the US Environmental Protection Agency has recently said USD 625 billion of drinking water infrastructure investment was going to be needed over the next 20 years. That’s 32% more than the estimate published five years ago.

AC: If we look more broadly at the global economy, one major topic is the offshoring of manufacturing in strategic industries. Do you see implications for water in terms of re-onshoring these strategically important assets?

JW: Semiconductor manufacturing in the US is now being re-shored for a number of reasons. There was a cluster in Arizona, where there were tax breaks going back many decades. Now USD 200 billion of new investment in semiconductor manufacturing in the US is coming through and a good part of that is going into Arizona. Some major manufacturers announced they are expanding there, but obviously it’s a place where there isn’t an abundance of water.

This is an important driver in terms of the water theme – with semiconductor fabrication facilities, around 6% of the investment cost will go into water infrastructure, either to produce ultra-pure water that’s used in the manufacturing process or to re-use water via a closed loop system. Water scarcity has increased the focus on water re-use, which increases the opportunities for companies that provide solutions for that. This will be the case for a long time, so the long-term investment potential looks compelling.

AC: Another recent media topic is the contamination of water supplies in Europe and the US by ‘forever chemicals’. What’s being done to address that issue?

JW: This is another huge opportunity for water industry solution providers. ‘Forever chemicals’ are a broad category of compounds used in consumer products and industrial manufacturing since the 1940s. There are thousands of types that together are known as PFAs, and they are very effective for resisting water, grease and stains and to put out fires.

For clothing, they are used for waterproofing. They repel stains on carpets, they are used in cosmetics and in food packaging such as pizza boxes and microwave popcorn bags. They are also in firefighting foam and used at airports and military bases.

Unfortunately, they don’t break down in the environment – hence the name ‘forever chemicals’. Research has shown that exposure to high levels of these chemicals is linked to a greater risk of cancer as well as reduced vaccine response in children, according to the US Center for Disease Control.

It’s very easy to come into contact with these chemicals – either through water or through food contaminated with polluted water – and they build up over time. In the US, it’s been found that nearly everyone has some amount of these chemicals in their blood. Forever chemicals have been found in the Arctic, in the open ocean, in polar bears and pilot whales – it is almost everywhere because it’s been used for so long and doesn’t break down.

In the Netherlands, there’s an old chemical plant next to which people are being told not to eat any vegetables they grow in their gardens. Because of the health impacts, there have been a lot of lawsuits, particularly in the US. Recently, there have been a number of legal settlements specifically around firefighting foam. The chemicals’ properties made them really good for putting out liquid fuel fires in particular – think about an airport, if there’s a crash and you’ve got liquid fuel, it catches on fire and needs to put it out. It’s a great application used since the 1960s – but then these chemicals don’t break down. They leach into the groundwater and end up in contaminating the drinking water.

From among the thousands of court cases addressing this issue, some recent settlements with US industrial companies proposed that they pay out between USD 10.5 billion and USD 12.5 billion over 13 years to hundreds of cities to help them upgrade their water treatment systems to filter out particular types of forever chemicals referred to as PFAs.

But this is just the early stages. Think about the major settlements in other industries in the past – for tobacco it is about USD 200 billion, for asbestos about USD 200 billion. Now think about how broadly PFAs have been used and the cost of removing them: it’s going to be a very significant amount of money over a very long time.

If you are a solution provider in this area, that’s a business opportunity for you. And those opportunities are broad. It includes consulting companies that put together programmes to resolve the issue, companies who make testing equipment, companies who run labs, companies who run the systems, and companies who make filtration products to remove the chemicals from the water supply.

Long-term drivers such as climate change and PFA clean-ups are providing a strong tailwind for companies that develop solutions, so there is a lot of mileage yet in terms of the water investment theme.

AC: Justin, thank you.

This presentation includes a discussion on current market events and is not intended as investment advice or an offer of products or services by BNP Paribas Asset Management. Please keep in mind that the information and analysis in this presentation is only current as of the publication date.

Aviso legal

Algunos artículos pueden contener lenguaje técnico. Por esta razón, pueden no ser adecuados para lectores sin experiencia profesional en inversiones. Todos los pareceres expresados en el presente documento son los del autor en la fecha de su publicación, se basan en la información disponible y podrían sufrir cambios sin previo aviso. Los equipos individuales de gestión podrían tener opiniones diferentes y tomar otras decisiones de inversión para distintos clientes. El presente documento no constituye una recomendación de inversión. El valor de las inversiones y de las rentas que generan podría tanto bajar como subir, y es posible que el inversor no recupere su desembolso inicial. Las rentabilidades obtenidas en el pasado no son garantía de rentabilidades futuras. Es probable que la inversión en mercados emergentes o en sectores especializados o restringidos esté sujeta a una volatilidad superior a la media debido a un alto grado de concentración, a una mayor incertidumbre al haber menos información disponible, a una liquidez más baja o a una mayor sensibilidad a cambios en las condiciones sociales, políticas, económicas y de mercado. Algunos mercados emergentes ofrecen menos seguridad que la mayoría de los mercados desarrollados internacionales. Por este motivo, los servicios de ejecución de operaciones, liquidación y conservación en nombre de los fondos que invierten en emergentes podrían conllevar un mayor riesgo. Los activos privados son oportunidades de inversión no disponibles a través de mercados cotizados como por ejemplo las bolsas de valores de renta variable. Permiten a los inversores beneficiarse directamente a temas de inversión a largo plazo y pueden brindarles acceso a sectores especializados como infraestructura, inmobiliario, private equity y otros alternativos difícilmente disponibles a través de medios tradicionales. No obstante, los activos no cotizados requieren un examen minucioso, pues tienden a tener niveles elevados de inversión mínima y pueden ser complejos e ilíquidos.
Riesgo de inversión en cuestiones medioambientales, sociales y de buen gobierno (ESG): La falta de definiciones y etiquetas comunes o estandarizadas que integren los criterios ESG y de sostenibilidad en el ámbito de la Unión Europea puede dar lugar a diferentes enfoques por parte de las gestoras a la hora de establecer objetivos en materia de ESG. Además, puede dificultar la tarea de comparar estrategias que integren dichos criterios ESG y de sostenibilidad, ya que la selección y las ponderaciones utilizadas para elegir las inversiones pueden estar basadas en indicadores con el mismo nombre, pero con significados subyacentes diferentes. A la hora de evaluar un título determinado sobre la base de los criterios ESG y de sostenibilidad, la Gestora de Inversiones puede también recurrir a fuentes de datos ofrecidas por proveedores externos de análisis ESG. Dada la naturaleza dinámica de las cuestiones ESG, es posible que estas fuentes de datos estén incompletas, sean imprecisas o no estén disponibles. La aplicación de normas de conducta empresarial responsables al proceso de inversión puede llevar a la exclusión de los títulos emitidos por determinados emisores. Por lo tanto, la rentabilidad (del Subfondo) puede ser en ocasiones mejor o peor que la rentabilidad de los fondos comparables que no aplican dichas normas.

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