Introducing Europe’s First USA Environmental Impact Theme

Key takeaways

On August 29th 2023, we launched our Rize USA Environmental Impact UCITS ETF on the LSE and Xetra.

The world is currently facing the dual challenges of climate change and environmental degradation: while the impacts of the climate change are undeniable, the broader ecosystem is also suffering from human-induced destruction.

Five key areas to address are: climate change, clean air and soil, clean water, biodiversity and natural habitat, and general awareness.

As societies steer toward a more sustainable future, there is a growing momentum towards eco-conscious investments.

On August 29^th, 2023, the Rize USA Environmental Impact UCITS ETF (LUSA) debuted on the London Stock Exchange and Deutschen Börse Xetra.

LUSA seeks to invest in the most innovative and impactful US companies that potentially stand to benefit from developing and applying solutions that address the world’s most pressing climatic and environmental challenges. This includes leaders and innovators across clean water, EVs, renewables and hydrogen, energy efficiency, waste and the circular economy and nature-based solutions.

LUSA has been designed to address the six environmental objectives set out in the EU Taxonomy for Sustainable Activities: (1) Climate Change Mitigation; (2) Climate Change Adaptation; (3) The Sustainable Use and Protection of Water and Marine Resources; (4) The Transition to A Circular Economy; (5) Pollution Prevention and Control; and (6) The Protection and Restoration of Biodiversity and Ecosystems.

The world stands at a crossroads, facing the dual challenges of climate change and environmental degradation. While the impacts of climate change are undeniable—rising temperatures, increased wildfires and shifting weather patterns—the broader ecosystem is also suffering from human-induced destruction, jeopardising air, water and land quality, as well as biodiversity. However, amidst these pressing concerns, there is a glimmer of hope fuelled by conscious consumerism and groundbreaking technology that can shape a greener future. Here, we delve into various aspects of environmental preservation, including clean water, electric vehicles (EVs), renewables and hydrogen, energy efficiency, waste management, the circular economy and nature-based solutions.

Addressing Climate Change

Climate change is a global crisis demanding swift and decisive action. The Intergovernmental Panel on Climate Change (IPCC) underscores the urgency of transitioning key sectors like energy, transportation and industry to curb global warming to 1.5°C.¹

Achieving this goal requires reducing human-made carbon dioxide (CO₂) emissions by approximately 45% from 2010 levels by 2030, aiming for Net Zero.²

While the challenge is significant, a multitude of technological advancements already exists, with over 70% of current emissions being addressable through available solutions.³ Moreover, ongoing research and development efforts promise even more efficient and transformative technologies, setting the stage for a cleaner and more sustainable world.

Clean Air and Soil Restoration

Air and soil pollution are dire threats that necessitate immediate attention. Toxic emissions from combustion engines, fossil fuel power plants and industries contribute to air pollution, which accounts for 16% of global deaths.⁴ Meanwhile, soil pollution resulting from industrial by-products, agrochemicals and waste imperils soil quality, impacting the food security of nearly 40% of the world’s population.⁵ The good news is that we possess the tools to combat these issues. Technologies that mitigate pollution and promote circular economy principles are already proving effective, forming multi-billion-dollar industries poised for further expansion in the coming years.

Securing Clean Water

Despite progress in water quality and availability, a significant portion of the global population still lacks access to safe drinking water. The blue economy, including ocean-linked economic opportunities, is predicted to double from $USD 1.5 trillion in 2010, or 5% of global gross domestic product, to an estimated $USD 3 trillion by 2030.⁶

However, water-related initiatives have only received a small share of investment. Recognising the need for sustainable water resource management and marine conservation, the potential for investors in this sector remains promising over the long term.

Preserving Biodiversity and Natural Habitat

The challenge of biodiversity loss and habitat degradation is starkly evident, with iconic ecosystems like the Amazon and the Congo undergoing visible deterioration and affecting numerous species. However, the decline of less-publicised organisms is equally disconcerting.

Between 1970 and 2022, monitored vertebrate species experienced an alarming 48% reduction.⁷

This decline arises from factors such as land-use changes, pollution, resource over-exploitation and rising temperatures. Preserving natural capital becomes paramount, as underscored by the 2021 UK government report, the Dasgupta Review, which revealed a 40% decline in natural capital per person from 1992 to 2014, a trend likely persisting beyond 2014 due to ongoing drivers like climate change, habitat loss and overexploitation.⁸ Thus, to avert a potential mass extinction event, unified collective action is imperative. Urgent measures are required to safeguard our natural capital; failure to do so will precipitate severe consequences, including shortages of food, water and the proliferation of diseases. The good news is that we possess the technological prowess to address these impending consequences, offering hope in our effort to safeguard the planet’s natural balance.

Charting a Sustainable Path Forward

Governments, businesses and investors are increasingly recognising the gravity of environmental risks. The World Economic Forum has warned that environmental degradation could exacerbate societal fragmentation,⁹ and studies published in the journals Nature,¹⁰ JSTOR¹¹ and ScienceDirect¹² have found that it is associated with an increased risk of civil conflict and social unrest. Media outlets like the BBC and Netflix are also playing a pivotal role in raising awareness of these issues. As a result, there is a growing momentum towards eco-conscious investments, which are fuelling opportunities in nature-based habitat restoration, water purification, erosion control and other areas.

Conclusion

The challenges posed by climate change and environmental degradation are daunting, but the emergence of eco-awareness and groundbreaking technologies offers a beacon of hope. As societies steer toward a more sustainable future, investments in clean water, EVs, renewables and hydrogen, energy efficiency, waste management, circular economy initiatives and nature-based solutions will shape the landscape of environmental revival. The urgency is palpable—now is the opportune moment to take action, ensuring the preservation of our planet for the prosperity of generations to follow.

References

IPCC, “Global Warming of 1.5°C”, 2023. Available at: https://www.ipcc.ch/sr15/

United Nations, “For a livable climate: Net-zero commitments must be backed by credible action”, 2023. Available at: https://www.un.org/en/climatechange/net-zero-coalition

United Nations, “The Paris Agreement”, 2023. Available at: https://unfccc.int/process-and-meetings/the-paris-agreement

The Lancet, “Pollution and health: a progress update”, May 2022. Available at: https://www.thelancet.com/journals/lanplh/article/PIIS2542-5196(22)00090-0/

United Nations, “Soil pollution a risk to our health and food security”, December 2020. Available at: https://www.unep.org/news-and-stories/story/soil-pollution-risk-our-health-and-food-security

360info, “The ocean index helping to drive the blue economy”, June 2023. Available at: https://360info.org/the-ocean-index-helping-to-drive-the-blue-economy

Mongabay, “Global study of 71,000 animal species finds 48% are declining”, June 2023. Available at: https://news.mongabay.com/2023/06/global-study-of-71000-animal-species-fin

The Economics of Biodiversity: The Dasgupta Review, “”, February 2021. Available at: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/957629.pdf

World Economic Forum, “The Global Risks Report 2023 18th Edition”, January 2023. Available at: https://www3.weforum.org/docs/WEF_Global_Risks_Report_2023.pdf

Nature, “Drought-Induced Civil Conflict Among the Ancient Maya”, July 2022. Available at: https://www.nature.com/articles/s41467-022-31522-x

JSTOR, “Climate Change and Civil Unrest: The Impact of Rapid-onset Disasters”, March 2015. Available at: https://www.jstor.org/stable/24546283

ScienceDirect, “Environmental conflicts and defenders: A global overview”, July 2020. Available at: https://www.sciencedirect.com/science/article/pii/S0959378020301424