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November 23, 2020 / Regnan Global Equity Impact Solutions Fund

Regnan’s Global Equity Impact Solutions Fund invests in mission-driven companies we believe are well placed to solve the world’s biggest problems.

This is the story of one of those companies, US water treatment innovator Evoqua.

Water pollution accounts for 1.8 million deaths a year, according to the Lancet Commission on Pollution and Health

Governments are responding to the harmful effects of bad water by tightening environmental regulations. But companies are under-investing in pollution prevention and instead spending on costly clean-ups.

Efficiency in water use is also increasingly critical. By 2050, manufacturing demand for water will be 400 per cent higher than 2000, the United Nations believes.

A water treatment innovator

Regnan’s impact investment team aims to outperform the broad global equity market over the long term by investing in companies that provide solutions for the world’s growing sustainability needs.

One of those companies is US water innovator Evoqua which provides water treatment services, systems and technologies mainly to North American customers.

Pittsburgh-based Evoqua serves a broad range of markets including pharma, food & beverage, microelectronics, power and general manufacturing.

It treats influent water (freshwater used in industrial, commercial, and municipal applications) and effluent water (used water that needs treating before returning to the environment).

This allows users to withdraw less freshwater from the environment and properly treat wastewater before discharge. By enabling higher rates of water re-use by manufacturers, Evoqua helps reduce their growing demand for water.

As well as selling filtration systems, Evoqua is disrupting water treatment with an attractive business model based on outsourced water treatment.

This allows customers to focus on their core business. If all industrials outsourced their water treatment, the $US 6 billion industrial water filtration market could double to $US12 billion.

A competitive position

Evoqua has the highest or second-highest market share in the US in every segment.

It has the biggest service network in North America – a competitive advantage that gives Evoqua proximity to a greater number of customers.

The company is developing its outsourcing business further with Water One, a digital platform that enables customers to optimise performance through remote monitoring and predictive maintenance.

There is no upfront cost — clients pay by volume used.

Momentum is picking up far ahead of management expectations. Clients won from competitors account for 20 per cent of Water One sales.

Evoqua is helping solve the world’s biggest problems  

Regnan identifies companies such as Evoqua using the 17 United Nations Sustainable Development Goals (SDGs) and their 169 underlying targets as an investment lens.

The SDGs are a 15-year plan to end poverty, protect the planet and improve the lives and prospects of everyone, everywhere.

In 2019 the UN called for “a decade of ambitious action to deliver the goals by 2030.

“Evidence shows that investing in the SDGs makes economic sense, with estimates highlighting that achieving the SDGs could open up US$12 trillion of market opportunities and create 380 million new jobs,” the UN says.

Drawing on the SDGs and their targets, Regnan’s investment team has built a comprehensive, proprietary investment framework – the Regnan SDG Taxonomy.

INSERT LOGOS FOR SDGS 3 AND 9

Evoqua’s activities contribute to four SDG targets for 2030:

  • SDG target 3.9: Substantially reduce the number of deaths and illnesses from hazardous chemicals and air, water and soil pollution and contamination
  • SDG target 6.1: Achieve universal and equitable access to safe and affordable drinking water for all
  • SDG target 6.3: Improve water quality by reducing pollution, eliminating dumping and minimising release of hazardous chemicals and materials, halving the proportion of untreated wastewater and substantially increasing recycling and safe reuse globally
  • SDG target 6.4: Substantially increase water-use efficiency across all sectors and ensure sustainable withdrawals and supply of freshwater to address water scarcity and substantially reduce the number of people suffering from water scarcity

Find out more

Regnan is a responsible investment leader with a long and proud heritage providing advice and insights on important environmental, social and governance issues.

For more than 20 years our pioneering analysis has changed the way investors and businesses think about value creation and their wider responsibilities to society.

Building on that expertise, in 2020 Regnan expanded into responsible investment funds management, backed by the considerable resources of Pendal Group.

While continuing to provide engagement, advisory and research services, Regnan now also delivers innovative sustainable and impact investment solutions.

The new Regnan Global Equity Impact Solutions Fund invests in mission-driven companies we believe are well placed to solve the world’s biggest problems.

Managed by a four-person investment team based in London, the Fund aims to outperform the broad global equity market over the long term by investing in companies that provide solutions for the growing, unmet sustainability needs of society and the environment.

Regnan Global Equity Impact Solutions Fund is distributed in Australia by Pendal and in the UK, Europe and the US by J O Hambro.

Australian investors: Contact Jeremy Dean at [email protected]

Information for UK, European and other international investors: www.regnan-johcm.com

This article has been prepared by Pendal Fund Services Limited (PFSL) ABN 13 161 249 332, AFSL No 431426 and the information contained within is current as at 27 November 2020. It is not to be published, or otherwise made available to any person other than the party to whom it is provided.

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Regnan Global Equity Impact Solutions Fund

This fund is distributed in Australia via Pendal and in the UK, Europe and other countries via J O Hambro Capital Management.

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