The commodity markets have taken a pounding over the last few years, but there is one invaluable commodity that is getting a higher profile these days. While you may be able to get it right out of your kitchen sink, there are many places in the world that may not be so lucky. For this reason, some have speculated that we may be on the path to peak water.
Based on recent data from the World Resources Institute, here are the countries that are expected to get hit the hardest by water shortages in the coming decades:
The report notes that more people continue to move to cities and that this can put stress on the established water supply. Combine this with growing population and consumption, and some regions will struggle more than others to replenish water when it is needed. Circumstances are also exacerbated by changing climates: some areas that are wet are becoming drier, and vice versa.
A total of 167 countries were examined for “water stress” which is considered by the report as a combination of depletion and competition for surface water. Of the nations examined, there are 33 countries that are expected to have extremely high water stress by 2040. Here’s some that will feel it the most:
In particular, life will not get any easier in the Middle East: 14 of the 33 countries with extremely high water stress are in the region. Nine of those countries scored a five out of five for water stress: Bahrain, Kuwait, Palestine, Qatar, United Arab Emirates, Israel, Saudi Arabia, Oman and Lebanon. The Middle East relies heavily on groundwater and desalinated sea water, and such ongoing water challenges could amplify volatility in the area.
The largest economies in the world, such as the United States, China and India, will also face stress in particular regions. For example, WRI notes that the southwestern United States and China’s Ningxia province could see water stress levels rise 40% to 70%.
Here’s a previous map we have shown that covers water withdrawals and deliveries in the United States:
Sustainable Investing: Debunking 5 Common Myths
Do sustainable strategies underperform conventional ones? This infographic shines a light on the realities of sustainable investing and the ESG framework.
Sustainable Investing: Debunking 5 Common Myths
It began as a niche desire. Originally, sustainable investing was confined to a subset of investors who wanted their investments to match their values. In recent years, the strategy has grown dramatically: sustainable assets totaled $12 trillion in 2018.
This represents a 38% increase over 2016, with many investors now considering environmental, social, and governance (ESG) factors alongside traditional financial analysis.
Despite the strategy’s growth, lingering misconceptions remain. In today’s infographic from New York Life Investments, we address the five key myths of sustainable investing and shine a light on the realities.
|Sustainable strategies underperform conventional strategies||Sustainable strategies historically match or outperform conventional strategies|
In 2015, academics analyzed more than 2,000 studies—and found that in roughly 90% of the studies, companies with strong ESG profiles had equal or better financial performance than their non-ESG counterparts.
A recent ranking of the 100 most sustainable corporations found similar results. Between February 2005 and August 2018, the Global 100 Index made a net investment return of 127.35%, compared to 118.27% for the MSCI All Country World Index (ACWI).
The Global 100 companies show that doing what is good for the world can also be good for financial performance.
—Toby Heaps, CEO of Corporate Knights
|Sustainable investing only involves screening out “sin” stocks||Positive approaches that integrate sustainability factors are gaining traction|
In modern investing, exclusionary or “screens-based” approaches do play a large role—and tend to avoid stocks or bonds of companies in the following “sin” categories:
However, investment managers are increasingly taking an inclusive approach to sustainability, integrating ESG factors throughout the investment process. ESG integration strategies now total $17.5 trillion in global assets, a 69% increase over the past two years.
|Sustainable investing is a passing fad||Sustainable investing has been around for decades and continues to grow
Over the past decade, sustainable strategies have shown both strong AUM growth and positive asset flows. ESG funds attracted record net flows of nearly $5.5 billion in 2018 despite unfavorable market conditions, and continue to demonstrate strong growth in 2019.
Not only that, the number of sustainable offerings has increased as well. In 2018, Morningstar recognized 351 sustainable funds—a 50% increase over the prior year.
|Interest in sustainable investing is mostly confined to millennials and women||There is widespread interest in sustainable strategies, with institutional investors leading the way|
Millennials are more likely to factor in sustainability concerns than previous generations. However, institutional investors have adopted sustainable investments more than any other group—accounting for nearly 75% of the managed assets that follow an ESG approach.
In addition, over half of surveyed consumers are “values-driven”, having taken one or more of the following actions with sustainability in mind:
- Boycotted a brand
- Sold shares of a company
- Changed the types of products they used
Women and men are almost equally likely to be motivated by sustainable values, and half of “values-driven” consumers are open to ESG investing.
5. Asset Classes
|Sustainable investing only works for equities||Sustainable strategies are offered across asset classes|
This myth has a basis in history, but other asset classes are increasingly incorporating ESG analysis. For instance, 36% of today’s sustainable investments are in fixed income.
While the number of sustainable equity investments remained unchanged from 2017-2018, fixed-income and alternative assets showed remarkable growth over the same period.
Tapping into the Potential of Sustainable Investing
It’s clear that sustainable investing is not just a buzzword. Instead, this strategy is integral to many portfolios.
By staying informed, advisors and individual investors can take advantage of this growing strategy—and improve both their impact and return potential.
Which Companies Are Responsible For the Most Carbon Emissions?
Since 1965, over ⅓ of the world’s cumulative carbon emissions can be traced back to just 20 fossil fuel companies. Who are the biggest contributors?
20 Companies Responsible For the Most Carbon Emissions?
Since 1965, it’s estimated over 1.35 million metric tons (MtCO₂e) of greenhouse gases have been released into the atmosphere—and over a third can be traced back to just 20 companies.
This week’s chart draws on a dataset from the Climate Accountability Institute, and highlights the companies which have been responsible for the most carbon emissions in the past half-century.
The Sum of their Carbon Emissions
Between 1965-2017, the top 20 companies have contributed 480,169 MtCO₂e in total carbon emissions, or 35% of cumulative global emissions. This whopping amount is mostly from the combustion of their products—each company on this chart deals in fossil fuels.
The largest contributor? Saudi Aramco, the national petroleum and natural gas company of Saudi Arabia. Saudi Aramco actually comes in first on another list as well—it’s the most profitable company, making over $304 million daily.
However, this financial gain came at a significant cost: the state-owned giant’s operations have resulted in 59,262 MtCO₂e in carbon emissions since 1965. To put that into perspective, this total is more than six times China’s emissions in 2017 alone (9,838 MtCO₂e).
Explore the full list of companies by location, who owns them, and their total 1965–2017 emissions count below:
|Company||Country||Ownership||All Emissions, MtCO₂e|
|Total Emissions||480,169 MtCO₂e|
|Saudi Aramco||🇸🇦 Saudi Arabia||State-owned||59,262|
|Exxon Mobil||🇺🇸 U.S.||Investor-owned||41,904|
|National Iranian Oil Co.||🇮🇷 Iran||State-owned||35,658|
|Royal Dutch Shell||🇳🇱 Netherlands||Investor-owned||31,948|
|Coal India||🇮🇳 India||State-owned||23,124|
|Petroleus de Venezuela||🇻🇪 Venezuela||State-owned||15,745|
|Peabody Energy||🇺🇸 U.S.||Investor-owned||15,385|
|Abu Dhabi National Oil Co.||🇦🇪 UAE||State-owned||13,840|
|Kuwait Petroleum Corp.||🇰🇼 Kuwait||State-owned||13,479|
|Iraq National Oil Co.||🇮🇶 Iraq||State-owned||12,596|
|Total SA||🇫🇷 France||Investor-owned||12,352|
|BHP Billiton||🇦🇺 Australia||Investor-owned||9,802|
A Greener Business Model?
According to the researchers, all the companies that show up in today’s chart bear some responsibility for knowingly accelerating the climate crisis even after proven scientific evidence.
In fact, U.S.-based Exxon Mobil is currently on trial for misleading investors: the company downplayed the effect of climate change on its profitability, while internal calculations proved to be much larger. It also sowed public doubt on the immense impacts of rising greenhouse gas levels on the planet.
Growing sustainability and environmental concerns threaten the viability of old business models for these corporations, causing many to pivot away from the fossil fuel focus. Take BP for example—originally named British Petroleum, the company embraced “Beyond Petroleum” as its new rallying cry. More recently, it launched a carbon footprint calculator and is committed to keeping its carbon emissions flat into 2025.
The first step to reducing your emissions is to know where you stand. Find out your #carbonfootprint with our new calculator & share your pledge today!— BP (@BP_plc) October 22, 2019
However, the Climate Accountability Institute argues that more can still be done, with the researchers calling for these companies to reduce their fossil fuel production in the near future.
Continued pressure on these “Big Oil” companies to peak their carbon emissions, and urgently increase their renewable energy investment, may help curb the climate crisis before it’s too late.
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