Sustainability and Corporate Governance Report 202
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HANDE S NDEL BANK N F NDER – HOW WE TAKE A TI N T
O REDUCE CLIMATE IMPACT NKEN FONDER C O Water – a lifebuoy for development Water lies at the heart of climate change adaptation and serves as a crucial link between the climate system, human society and the environment. Clean water, sanitation and hygiene are fundamental in a number of areas: poverty alleviation, climate adaptation, human health, women’s rights, children’s education, and the economy and development of countries. Water is also a prerequisite for food and energy production, and lack of water can lead to conflicts both within and between countries. Although most of the earth is covered by water, only a few per cent of the total amount of water is freshwater. Most of the freshwater is locked up in glaciers, and no more than one per cent is accessible to us humans. According to United Nations Water, which coordinates UN and international organisations around water and sanitation issues, more than two billion people live in countries with water scarcity. Our approach to water By seeking out companies that offer solutions in the form of products and services, we can get closer to reaching the goal of giving everyone in the world access to clean water. An important part of this work is analysing the companies’ impact on water and the efficiency in their use of it. In dialogue with the companies, we can make a contribution to their water efficiency. Joakim By, who manages the fund Handelsbanken Amerika Småbolag Tema, notes that in many developed countries the water infrastructure is outdated and in great need of investment. In the US alone, there were over 400,000 water leaks last year. “Global demand for water already exceeds supply, and the situation will only worsen in the future with a growing population,” By says. “Increased prosperity in many developing countries also leads to a greater demand for water. We also see that climate change is resulting in both droughts and floods, which puts additional pressure on the strained situation.” In addition to tackling outdated infrastructure, we also need to find new ways to clean and reuse water, reduce leakage and invest in new water technology. “We’re primarily looking for solution companies that can increase the supply of water. These are mostly businesses providing water purification, desalination of seawater or water reuse.” The need for new infrastructure and smart technical solutions for purifying and reusing water are paving the way for companies in the water sector, and such companies show great growth potential in the coming decades. Engagement for reduced water consumption Handelsbanken Amerika Småbolag Tema invests in Evoqua Water, a leading company in water purification and filtration technology. The company, a clear market leader and bigger than its three closest competitors combined, focuses primarily on various technologies for the purification and reuse of industrial water. “Companies that want to reduce their water use and reuse more water can outsource this service to Evoqua Water’s circular solution, Water One. It is also becoming increasingly clear that, through regulations and other measures, nations will place increased demands on industries themselves to find solutions for purifying the water they use. This will benefit demand. We also believe that US president Biden’s infrastructure package will have a strong focus on water and toxic chemicals, which will give Evoqua an extra boost starting in 2022.” 34 Information about risk Past performance does not predict future returns. The value of the money invested in the fund can increase or decrease and there is no guarantee that all of your invested capital can be redeemed. The fund’s prospectus (“Informations broschyr”), fund rules and KIID are available at handelsbanken.se/funds.