Visualizing the Five Drivers of Forest Loss
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Visualizing the Five Drivers of Forest Loss

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The following content is sponsored by Carbon Streaming Corporation.

drivers of forest loss

The Briefing

  • On average, the world loses more than 20 million hectares of forests annually.
  • Agriculture and commodity-driven deforestation each account for approximately a quarter of annual forest loss.

Visualizing the Five Drivers of Forest Loss

The world has lost one-third of its forests since the ice age, and today, approximately 15 billion trees are cut down annually.

Forests are wellsprings of biodiversity and an essential buffer against climate change, absorbing billions of tonnes of carbon dioxide emissions every year. Yet, forest loss continues to grow.

The above infographic sponsored by Carbon Streaming Corporation highlights the five primary drivers behind forest loss.

Deforestation vs. Degradation

‘Forest loss’ is a broad term that captures the impacts of both permanent deforestation and forest degradation. There is an important distinction between the two:

  • Permanent deforestation: Refers to the complete removal of trees or conversion of forests to another land use (like buildings), where forests cannot regrow.
  • Forest degradation: Refers to a reduction in the density of trees in the area without a change in land use. Forests are expected to regrow.

Forest degradation accounts for over 70% or 15 million hectares of annual forest loss. The other 30% of lost forests are permanently deforested.

Driving factorCategoryAverage annual forest loss (2001-2015, million hectares)
Commodity-driven deforestationPermanent deforestation5.7
UrbanizationPermanent deforestation0.1
Forestry productsForest degradation5.4
Shifting agricultureForest degradation5
WildfiresForest degradation4.8
TotalN/A21

Commodity-driven deforestation, which includes removal of forests for farming and mining, is the largest driver of forest loss. Agriculture alone accounts for three-fourths of all commodity-driven deforestation, where forests are often converted into land for cattle ranches and plantations.

The harvesting of forestry products like timber, paper, pulp, and rubber accounts for the largest share of forest loss from degradation. This process is often managed and planned so that forests can regrow after the harvest.

Shifting agriculture and wildfires each account for around 5 million hectares or one-fourth of annual forest loss. In both cases, forests can replenish if the land is left unused.

Urbanization—the conversion of forests into land for cities and infrastructure—is by far the smallest contributor, accounting for less than 1% of annual forest loss.

How Much Carbon Do Forests Absorb?

The world’s forests absorbed nearly twice as much carbon dioxide (CO2) as they emitted between 2001 and 2019, according to research published in Nature.

On a net basis, forests sequester 7.6 billion tonnes of CO2 equivalent (CO2e) annually, which equates to around 15% of global CO2e emissions. As the impacts of climate change intensify, protecting forests from deforestation and degradation is increasingly critical.

Carbon Streaming Corporation accelerates climate action through carbon credit streams on REDD+ projects that protect the Earth’s forests. Click here to learn more now.

Where does this data come from?

Source: Our World in Data

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Ranked: The World’s 20 Biggest Hedge Funds

This annual ranking shows the world’s largest hedge funds, which collectively hold an estimated $45 trillion in assets under management.

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The Briefing

  • Bridgewater Associates remains the top hedge fund by assets under management (AUM)
  • Brevan Howard witnessed strong growth in AUM, moving from 26th to 19th in the ranking

Ranked: The World’s 20 Biggest Hedge Funds

Collectively, the world’s 15,000 hedge funds manage around $4.5 trillion in assets for their clients, weathering economic storms and world events to ensure returns.

This visual breaks down the world’s biggest hedge funds in terms of assets under management using data from Pensions & Investments.

The Top 20

The world’s biggest hedge fund by a mile is Ray Dalio’s Bridgewater Associates. At the time of this ranking, Bridgewater managed over $126 billion in assets for clients as wide ranging as university endowment funds, charities, and foreign country’s central banks.

Here’s a closer look at the ranking:

RankHedge FundAssets (millions USD)Headquarters
#1Bridgewater Associates$126,400🇺🇸 U.S.
#2Man Group$73,500🇬🇧 UK
#3Renaissance Technologies$57,000🇺🇸 U.S.
#4Millennium Management$54,968🇺🇸 U.S.
#5Citadel$52,970🇺🇸 U.S.
#6D.E. Shaw Group$47,861🇺🇸 U.S.
#7Two Sigma Investments/Advisers$40,969🇺🇸 U.S.
#8Davidson Kempner Capital Management$37,450🇺🇸 U.S.
#9Farallon Capital Management$37,400🇺🇸 U.S.
#10TCI Fund Management$36,200🇬🇧 UK
#11Marshall Wace$34,400🇬🇧 UK
#12Ruffer$31,662🇬🇧 UK
#13AOR Capital Management$28,200🇺🇸 U.S.
#14Anchorage Capital Group$27,100🇺🇸 U.S.
#15Baupost Group$26,300🇺🇸 U.S.
#16Point72 Asset Management$26,100🇺🇸 U.S.
#17Capula Investment Management$25,000🇬🇧 UK
#18Wellington Management$24,968🇺🇸 U.S.
#19Brevan Howard Asset Management$23,353🇬🇧 UK
#20PIMCO$23,054🇺🇸 U.S.

This annual ranking uses AUM data from June 2022

Overall, 70% of hedge funds are headquartered in North America, with many of the world’s largest based in the United States, specifically.

ℹ️ Hedge funds are essentially pooled investments pulled together by the fund’s clients. The managers then utilize a variety of strategies to produce returns on investments, buying and selling assets such as stocks, commodities, real estate, bonds, and so on. The fund itself makes money by charging fees to their clients and taking a percentage of the profits earned on trading.

The Fastest Growing Hedge Funds

Many of these large hedge funds were new to the top 20 category, having moved up dramatically from the 2021 ranking. Here’s a look at some of the AUM growth rates year-over-year.

RankHedge FundGrowth in AUM (% Change Y-o-Y)
#1Brevan Howard Asset Management46.0%
#2Citadel40.8%
#3PIMCO25.3%
#4D.E. Shaw Group20.4%
#5Point72 Asset Management19.7%
#6Bridgewater Associates19.6%
#7Man Group15.9%
#8Wellington Management10.5%
#9AQR Capital Management8.0%
#10Millennium Management5.1%
#11Capula Investment Management4.6%
#12Marshall Wace3.9%
#13Two Sigma Investments/Advisers 3.6%
#14Davidson Kempner Capital Management0.3%
#15Renaissance Technologies-1.7%
#16Farallon Capital Management-1.8%
#17TCI Fund Management-9.5%
#18Anchorage Capital Group-12.8%
#19Baupost Group-15.2%
#20Ruffer-

UK-based Brevan Howard jumped from 26th to 19th, witnessing a 46% increase in their assets under management.

Hedge fund growth can be uncorrelated with the broader market, and is not necessarily an indicator of the overall economy. However, analyzing the strategies used by hedge funds and their performance can often provide useful insight for investors.

Where does this data come from?

Source: The Pensions & Investments annual ranking of largest hedge funds.

Source: This ranking uses AUM data from June 2022. This visualization can be used as a consistent snapshot of the size and proportionality of hedge funds. Current AUM for each may very.

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Disruptive Materials: Visualizing America’s Import Dependency

A handful of materials are increasingly crucial for the next generation of emerging technologies. But as the data shows, the U.S. is heavily reliant on foreign nations to supply these materials. (Sponsored)

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The Briefing

  • The U.S. is 100% import dependent on manganese and graphite
  • China and Canada are the two nations the U.S. is most import reliant on

America’s Import Dependency for Disruptive Materials

The U.S. is expected to see surging demand for disruptive materials, which are those deemed to have high level importance for their role in next generation technologies. But many of these disruptive materials like manganese, cobalt, and lithium are primarily imported from foreign countries.

This graphic from Global X ETFs takes a closer look at America’s reliance on net imports for these disruptive materials. Countries are ranked by how many commodities of which the U.S. is a net importer. And net importer is defined as over 50% of domestic use or consumption comes from foreign sources rather than domestic production.

Ranking Country Reliance

The U.S. imports commodities from a lot of countries, including from economic rivals. And these commodities include well known ones like nickel, zinc, and lithium, which are critical to climate-friendly technologies. However, the data reveals that there are a select number of countries where dependency is highest. Here’s a look at the top eight countries.

CountryNumber of Commodities Net Import Reliant
🇨🇳 China 19-23
🇨🇦 Canada13-18
🇷🇺 Russia 7-12
🇮🇳 India7-12
🇧🇷 Brazil7-12
🇿🇦 South Africa 7-12
🇩🇪 Germany7-12
🇲🇽 Mexico7-12

The U.S. is most dependent on China where they are net import reliant on 19-23 different commodities, followed by Canada with 13-18. In addition, the U.S. is 100% import reliant on manganese and graphite, and 76% import reliant on cobalt.

As these materials become increasingly important for AI, robotics, drone technology, as well as for climate infrastructure like solar panels and wind turbines, nations will desire to bolster their own supply chains and be less reliant on other countries. This may also accelerate due to the pandemic highlighting the fragility behind global supply chains.

Overall, this creates an environment where the market for disruptive materials will see extended periods of high demand and rising prices, otherwise known as a demand supercycle.

Introducing the Global X Disruptive Materials ETF

The Global X Disruptive Materials ETF (Ticker: DMAT) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of the Solactive Disruptive Materials Index.

To learn more about gaining exposure to the rising demand for disruptive materials, click here now.

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