Open the lid, chuck it in, close the lid – it’s not exactly hard for people to get rid of their rubbish. But these three simple steps are a long way from solving the problem. Whether sea creatures trapped in plastic packaging, gigantic rubbish heaps or children in the third world sifting through electrical scrap for recyclable components, shocking media images are forcing consumers to see the consequences of their actions for themselves.
Alongside climate change, the problem of waste is one of humanity’s greatest challenges. Countries around the world have been responding for a long time already, however: efforts to recycle waste, or to avoid it altogether, are increasing all the time. These days, recyclable materials make up a significant proportion of global waste flows. To give an example, some three quarters of waste in Europe and central Asia has the potential to be exploited through recycling or bio-management. In these latitudes inroads are currently being made into the use of plastic packaging in particular. Not only is plastic increasingly being taken out of packaging, but recycling is also rising strongly in this area. While the recycling rate in the European Union (EU) stood at only a third in 2010, by 2015 it had already passed the 40 per cent barrier. For waste paper the rate is actually above 70 per cent.
From the morning shower via the lunchtime sushi box to the evening takeaway, when not sleeping the average consumer produces waste almost without interruption. It is hardly surprising, then, that the disposal and treatment of waste such as water, film packaging or cardboard boxes is such a huge sector of the economy. Statista published figures on it last autumn. The statistics portal looked at the water supply, waste water, waste management and environmental damage remediation sectors as a single branch of industry. The experts put the size of this market in OECD states at USD 766.6 billion in 2017. The corresponding turnover was achieved by more than 132,000 businesses with 6 million employees. Unsurprisingly, the USA (based on 2016 figures) is the biggest single market, followed by Australia and Germany. With a turnover of just under USD 5.8 billion, Switzerland occupies 20th place in the rankings. New technologies such as electric cars, however, are also giving momentum to the recycling industry. The EU, for instance, demands a recovery rate of 50 per cent for an electric car battery. Umicore specialises in the disposal of lithium ion batteries. The Belgians use what is known as UHT technology, which produces hardly any residual waste and hence sets new standards in recycling.
The Swissquote Global Recycling Index invests in companies that are actively involved in the recycling, waste management, water treatment and pollution monitoring sectors or other environmental services with technologies, products and services. It is typical of the bank’s themes trading platform that a stock must first meet strictly defined criteria in respect of market capitalisation and trading volumes before it can even be considered for inclusion. The starting portfolio numbers 16 industry representatives, 9 of them from the USA. Among the US representatives is Waste Management, for instance. The Houston-based group considers itself the largest provider of environmental solutions in North America. In the USA and Canada Waste Management works for 21 million commercial, industrial and local authority customers. By converting the gas generated in the landfill sites into electricity, the company will become North America’s largest supplier of renewable energy. And business is booming: Waste Management posted record figures in 2018.
To enable investors to have systematic and diversified access to the segment, Leonteq has launched a tracker certificate on Swissquote Global Recycling Index in collaboration with PostFinance and Swissquote.
Issuer: Leonteq Securities AG, GuernseyGuarantor: PostFinance AG, Berne, Switzerland (Rating of the Guarantor: S&P AA)
Index Sponsor: Swissquote Bank SA
The most prominent index member from Europe offers strong operational momentum. Last year Veolia Environnement delivered two-digit percentage growth figures on the back of high waste volumes and cost savings. The French water supplier and waste manager is sharing the fruits of its success with shareholders, increasing its dividend by just under ten per cent. Based on the proposed distribution, the Veolia share is returning 4.5 per cent. At the moment, Befesa is involved in the recycling of hazardous residual materials from the steel and aluminium industry. By contrast, Biffa, by its own account Great Britain’s leading provider of recycling and waste management, specialises in plastic. The company is currently investing 15 million pounds in a new plastic recycling facility. It is to process more than a billion plastics drinks bottles every year. That will allow 3 million bottles a day to be converted into new food and drinks packaging. With a tracker certificate from Leonteq, investors can take a diversified position in this highly promising investment universe. The structured product passively tracks the actively managed Swissquote Global Recycling Index.
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