{{r.fundCode}} {{r.fundName}} {{r.series}} {{r.assetClass}}

Welcome to the new RBC iShares digital experience.

Find all things ETFs here: investment strategies, products, insights and more.

Water reduction is emerging as the next widely debated environmental issue. It impacts many global manufacturing sectors whose production is reliant on water. There is growing concern among the public that large industrial concerns, which use up to 30% of the planet’s fresh water, should be more vigilant about their consumption.1 The UN Principles for Responsible Investment (UN PRI), to which we are a signatory, postulates that water is a finite shared resource, as well as a basic human right. Increasing demand, climate change and pollution are putting pressure on global water resources.

This raises 3 important questions:

What water issues do we face?

Which industries are most affected?

What questions on water usage should we be asking the companies in which we invest?

What water issues do we face?

  • Water scarcity due to climate change.
  • Water pollution driven by agriculture, industry and excessive use of plastic.
  • Low water tariffs.
  • The geopolitical tensions that arise as a result of water.

Which industries are most plagued by water issues?

Agriculture & farming:

Agriculture is the single biggest cause of water pollution globally.2 The re-routing of rivers and huge irrigation projects are all required to grow crops and feed livestock. At the same time, the excrement of livestock goes into the rivers, polluting the water supply.


Mining:

Water is critical to copper production. Yet 78% of copper produced by the world’s 20 largest mines is currently in water-challenged regions. The use of fresh water has been the source of disputes between mining companies and local communities worldwide. This has resulted in temporary mine closures, production stoppages and delays in new licenses.


Semiconductors:

A typical semiconductor manufacturing facility uses 2-4 million gallons (15m litres) of ultra-pure water per day.3 To put this into context, the average person uses ~100 gallons of water per day. This would mean water used at one plant is enough to supply 40,000 people with their daily water needs.


Driving change

We believe that better pricing of water tariffs would encourage more companies and people to be less wasteful. The following list includes some of the questions we ask our companies to give us a higher level of confidence that they are tackling their respective water issues in a proactive and effective manner.

General questions on water:

  1. Is the company in a water stressed region?
  2. What is the company’s water footprint? This looks at volume, type of water (surface water, groundwater, desalinated water), location and timing.
  3. Has the company audited their water use? Hired an independent expert?
  4. What efforts are they doing on water consumption/ recycling/ reducing waste & plastic waste (that make their way into our water stream and the GPGP)?
  5. What efforts are they making to treat waste-water? How do they treat it? And where does it go?
  6. What are their current water tariffs (clean and waste) and how have they trended?
  7. What regulations have they encountered?
  8. What public backlash has the company encountered?

1. Our World in Data, Freshwater Use, July 2018.
2. Food and Agriculture Organisations of the United Nations, “Water pollution from Agriculture: a global review”, 2017.
3. Fortune Magazine, ‘Taiwan’s drought is exposing just how much water chipmakers like TSMC use’, 12 June 2021.

Disclosure

This document is provided by RBC Global Asset Management (RBC GAM) for informational purposes only and may not be reproduced, distributed or published without the written consent of RBC GAM or its affiliated entities listed herein. This document does not constitute an offer or a solicitation to buy or to sell any security, product or service in any jurisdiction; nor is it intended to provide investment, financial, legal, accounting, tax, or other advice and such information should not be relied or acted upon for providing such advice. This document is not available for distribution to investors in jurisdictions where such distribution would be prohibited.

RBC GAM is the asset management division of Royal Bank of Canada (RBC) which includes RBC Global Asset Management Inc., RBC Global Asset Management (U.S.) Inc., RBC Global Asset Management (UK) Limited, RBC Global Asset Management (Asia) Limited, and BlueBay Asset Management LLP, which are separate, but affiliated subsidiaries of RBC.

In Canada, this document is provided by RBC Global Asset Management Inc. (including PH&N Institutional) which is regulated by each provincial and territorial securities commission with which it is registered. In the United States, this document is provided by RBC Global Asset Management (U.S.) Inc., a federally registered investment adviser. In Europe this document is provided by RBC Global Asset Management (UK) Limited, which is authorised and regulated by the UK Financial Conduct Authority. In Asia, this document is provided by RBC Global Asset Management (Asia) Limited, which is registered with the Securities and Futures Commission (SFC) in Hong Kong.

Additional information about RBC GAM, Prospectus and Key Investor Information may be found at www.rbcgam.com.

This document has not been reviewed by, and is not registered with any securities or other regulatory authority, and may, where appropriate and permissible, be distributed by the above-listed entities in their respective jurisdictions.

Any investment and economic outlook information contained in this document has been compiled by RBC GAM from various sources. Information obtained from third parties is believed to be reliable, but no representation or warranty, express or implied, is made by RBC GAM, its affiliates or any other person as to its accuracy, completeness or correctness. RBC GAM and its affiliates assume no responsibility for any errors or omissions.

Opinions contained herein reflect the judgment and thought leadership of RBC GAM and are subject to change at any time. Such opinions are for informational purposes only and are not intended to be investment or financial advice and should not be relied or acted upon for providing such advice. RBC GAM does not undertake any obligation or responsibility to update such opinions.

RBC GAM reserves the right at any time and without notice to change, amend or cease publication of this information.

Past performance is not indicative of future results. With all investments there is a risk of loss of all or a portion of the amount invested. Where return estimates are shown, these are provided for illustrative purposes only and should not be construed as a prediction of returns; actual returns may be higher or lower than those shown and may vary substantially, especially over shorter time periods. It is not possible to invest directly in an index.

Some of the statements contained in this document may be considered forward-looking statements which provide current expectations or forecasts of future results or events. Forward-looking statements are not guarantees of future performance or events and involve risks and uncertainties. Do not place undue reliance on these statements because actual results or events may differ materially from those described in such forward-looking statements as a result of various factors. Before making any investment decisions, we encourage you to consider all relevant factors carefully.

This has been provided by RBC Global Asset Management Inc. (RBC GAM) and is for informational purposes, as of the date noted only. It is not intended to provide legal, accounting, tax, investment, financial or other advice and such information should not be relied upon for providing such advice. RBC GAM takes reasonable steps to provide up-to-date, accurate and reliable information, and believes the information to be so when provided. Past performance is no guarantee of future results. Interest rates, market conditions, tax rulings and other investment factors are subject to rapid change which may materially impact analysis that is included in this document. You should consult with your advisor before taking any action based upon the information contained in this document.

Information obtained from third parties is believed to be reliable but RBC GAM and its affiliates assume no responsibility for any errors or omissions or for any loss or damage suffered. RBC GAM reserves the right at any time and without notice to change, amend or cease publication of the information.

® / TM Trademark(s) of Royal Bank of Canada. Used under licence. © RBC Global Asset Management Inc., 2022
Publication date: February 2022