Water – Impacted in Many Ways by Climate Change – A Safer Investment Perhaps

C-MACC Weekly Sustainability and Energy Transition Report

Water – Impacted in Many Ways by Climate Change – A Safer Investment Perhaps

• 1^st Topic of the Week: Investing in Water – The water sector has shown steady growth over the last 5 years without the volatility we have seen elsewhere. Population growth and changing weather patterns suggest that investment in water conservation and clean water production should accelerate – driving more business upside for some.
• 2^nd Topic of the Week: How does Europe survive in chemicals? As the costs rise around decarbonization options for European chemicals, partly because of higher structural costs and partly because of the reluctance to accept CCS as an option, we question whether much of the industry will survive, especially in Germany.
• Otherwise – We look at battery recycling, easier in some ways than polymers, but still faced with customers not willing to pay premiums; we look at the investment challenges presented by low carbon prices in Europe and China’s likely dominance of power-related spending in Africa.

Exhibit 1: Our water index wins on lack of volatility and essentially wins on performance if you ignore the recent volatility of Aemetis in the biofuels group.

Source: Capital IQ, C-MACC Analysis, April 2024