Please note: this blog was published in July 2020 and its content is based on what was correct at the time of writing. As a result, some of the facts and opinions may no longer be current or relevant.
The world has expensive resources such as gold, oil and diamonds. However, these would all be worthless without the existence of water. Fresh water is essential for life. While a £1 coin may get you a bottle of water and little to no change, the demand for water is ever increasing in line with the population of the world. With an increasing population, more homes, roads and infrastructure are required to keep up, and more mouths to feed means more farms, with increasing water usage. If current trends continue, the scarcity of drinking water may result in its value being greater than diamonds. Veolia Environnement has taken the challenge of correcting the trends and looking after natural resources humans rely on.
Our Ethical Investment Plans include Veolia Environnement, which is held in the Pictet Global Environment Opportunities fund.
The finance stuff 📈
Company value: £10.3bn
Share price: £18.17
2019 Profits: £603.2m
What does Veolia do? 🤷
Founded in France in 1853 as a water company, the then named Compagnie Générale des Eaux was set up by the order of Napoleon III, the first president of France and nephew of the more widely recognised Napoleon I. Having expanded into the property and construction industries in the 1970s, the corporate strategy turned to waste management and energy by acquiring companies in those sectors in the 80s.
The company went through many name changes and restructures, and in 2005, it became Veolia Environnement, with the core focus being on water, waste management, energy and transport. Veolia Group is the global leader in resource management, with almost 171,000 employees across the globe. The Veolia team describe themselves as innovators who are committed to focusing on carbon reduction by preventing pollution, preserving natural resources and raising environmental awareness.
What positive impact is Veolia having? 🌱
Veolia has defined its commitment to sustainability by focusing on three key areas. To manage natural resources in a sustainable way, the company makes sure to support circular economy – this is an economic system designed to eliminate waste and bring the continual use of resources to a minimum. Veolia is also committed to combatting climate change and conserving and restoring biodiversity.
Veolia's second commitment pillar is to contribute to local development where the business has waste plants and to supply and maintain services crucial to human health and development.
Finally, the company’s third pillar revolves around the people they employ. Veolia works hard to guarantee a safe working environment, encourage professional development, and promote diversity and social rights.
What Veolia has to say 📣
“The time of taking natural resources for granted is over. Natural resources are being depleted while the need for them is increasing due to population growth, urban sprawl and rising standards of living. The world is facing a challenge both ecological and societal: ensuring everyone’s right to access essential services in the context of scarce resources and climate change. Veolia is determined to make today’s and tomorrow’s world more sustainable. Its vocation is to resource the world through the design and deployment of solutions to enable the development of access to resources, their preservation and their renewal. Day after day, with all its partners, our Group is building an economy that has a lower environmental impact and a higher societal impact; an economy not only at the service of the people but also of the environment.”
CEO and Chairman, Veolia
Corporate Responsibility Report, 2019
What Pictet think… 🤓
“With ongoing industrialization, urbanization and economic developments, the pressure on water resources continues to increase in many geographies. Challenges exist both in terms of water scarcity and related to water quality. Climate change is set to make these challenges worse in the decades ahead, while water infrastructure often appears inadequate. From this standpoint, investing across the entire water value chain provides a critical contribution to environmental sustainability.
A good example of a listed company that fits very well into this thematic perspective is Veolia, a France-based water utility and waste management company. It makes drinking water available to over 95 million individuals and is a provider of wastewater services for 60 million people. Its waste division is active in waste collection and processing with a strong focus on achieving a high rate of recovery through recycling. The company has a global footprint, being active in about 55 countries. We like it as it contributes in particular to the environmental challenges of water scarcity and pollution. “
To wrap up 🎁
Our oceans are filling up with plastic pollution and accelerating climate change continues to impact fragile ecosystems. Energy demand is soaring, with global energy use set to increase by 28% by 2040. Meanwhile, England, Scotland and Wales are set to face a 3 billion litres per day water deficit by the middle of the century. Veolia are committed to tackling these issues by committing to resourcing the world, supporting the people they employ, and playing an active role in the communities they operate in.
Please remember the value of your investments can go down as well as up, and you could get back less than invested.