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Global Decarbonisation Monthly Report | August

 

Key Events in July – EU legislative proposals and 2nd Rebalancing of our Climate Change ETF

EU goes deeper on its roadmap to the 2030 milestone: On July 14th, the European Commission submitted a series of legislative proposals that could allow the block to deliver on the net reduction target of 55% lower GHG emissions below 1990 levels. There are 55 legislative proposals covering a range of policy areas, including energy, transport, taxation and increasing reach of the EU Emissions Trading System (ETS).[1] Set up in 2005, the EU ETS is the world’s first international emissions trading system and is the largest one. The cap & trade system covers around 40% of all EU’s GHG emissions and sets limits to the emissions from ca. 10,000 installations in the power sector, manufacturing industry, and airlines operating within the EU.[2]

The underlying index of our Climate Change ETF was rebalanced: CLMA rebalances semi annually, in the first Wednesday in February and in August. As this report is published at the end of the first week in August, we wanted to take the opportunity to introduce the new constituents in more detail. There are 10 new companies being added to the universe, mostly companies that have recently listed via IPO and in a few cases via SPACs. 

Source: iClima Research, using S&P Trucost data.

 

Performance in July

The underlying index of CLMA closed the first half the year up 9.48%, and up ca 0.41% in July. In a month where capital rotated back to growth stories, 70.4% of the weight of CLMA had a positive share performance. A noticeable strong performance in the month and year is the Sustainable Buildings subsegment. AO Smith (AOS, up 30.1% YTD), Compagnie de Saint Gobain (SGO.PA up 70.27% YTD), Ferguson PLC (FERG up 15.15% YTD), Kingspan Group (KGP.L up 62.09% YTD), Lixil Corp (TJS.F up 42.79% YTD), NIBE Industrier (NIBE up 56.47% YTD), Resideo Technologies (REZI up 43.46% YTD), and Trane Technologies (TT, up 34.63% YTD). Source of all data: iClima/ Bloomberg. Please note that all performance figures are showing net data.

Past performance is on guarantee of future performance. Source of all data: iClima/ Bloomberg. Data as of 31.07.21

 

iClima Global Decarbonisation Enablers Performance Table (As of 31.07.21)

 

1M

3M

6M

YTD

12M

SI

CLMA iClima Global Decarbonisation Enablers UCITS ETF (Acc)

0.39%

3.74%

2.86%

9.28%

NA

22.14%

CLMA iClima Global Decarbonisation Enablers Index™

0.41%

3.81%

2.97%

9.48%

69.87%

22.45%

Performance before inception is based on back tested data. Back testing is the process of evaluating an investment strategy by applying it to historical data to simulate what the performance of such a strategy would have been. Back tested data does not represent actual performance and should not be interpreted as an indication of actual or future performance. Past performance for the index is in USD. Past performance is not an indicator for future results and should not be the sole factor of consideration when selecting a product. Investors should read the prospectus of the Issuer (“Prospectus”) before investing and should refer to the section of the Prospectus entitled ‘Risk Factors’ for further details of risks associated with an investment in this product. Source: Bloomberg / HANetf. Data as of 31/07/21. Please note that all performance figures are showing net data.  

 

Introducing the New Constituents

Arcimoto (FUV, up 5.63% in July, up 21.92% YTD) The Oregon based company maker of Fun Utility Vehicles (“FUV”), a three-wheeled electric motorcycle that combines efficiency, manoeuvrability and the excitement of a two-wheeled vehicle with stability, weather protection and carrying capacity required to become an alternative for a full-sized car selling at an affordable target base model price of $11,900. The company’s micro mobility products were delivered in record units in the 1Q21, with orders being taken for California, Oregon, Washington and Florida.[3]

ChargePoint Holdings (CHPT, down 31.9% in July, down 21.45% YTD) The California based EV charging company, operating since 2007, went public via a SPAC last September. The world’s largest EV charging business started trading at the NYSE at an initial value of $2.4 billion, while raising $500 million to fund additional US expansion as well as in Europe.[4] Original investors include Daimler, BMW, and Siemens. Solutions for businesses, fleets and individual riders integrating hardware, cloud services and support.[5] Currently with over 112K places to charge in North America, over 92 million charges have been delivered to date. The company has a market share of 73% of the Level 2 charging network.[6]

EVGo (EVGO, down 21.32% in July, down 21.32% YTD) The also California based EV charging company listed via SPAC last month. It is the largest fast charging DC network and first to be 100% powered by renewable energy.[7] Founded in 2010 by Texas based NRG Energy, it has over 800 fast charging locations in 65 metropolitan areas. EVGo has positioned as "OEM Agnostic", able to charge any EV. While a Level 2 charging point at 7.68 kW charges a passenger car in 3.3 hours, a fast DC 50 kW charging point does it in 30 minutes.[8]

Nuvve Holding Corp (NVVE, down 15.7% in July, down 14.96% YTD) Founded in 2010, also California based, Nuvve is a pure V2G player. The company’s cloud connected Grid Integrated Vehicle Platform (“GIVE”) transforms electric vehicles into grid assets. The company received funding from EdF back in 2017 and from Toyota and announced a SPAC in November last year.[9] The business combination completed in March, valuing the company at $104 million. Nuvve’s solution makes EV greener, allowing EVs to become reliable, dispatchable and monetizable assets.[10]  A key first application is fleet of school buses.

Proterra (PTRA, down 35.53% in July, down 34.89% YTD) Founded in 2004 and also based in California, Proterra is an automotive and energy storage company, manufacturing electric transit buses and electric charging systems. It became listed via a SPAC last June. It has delivered over 650 electric buses, produced over 340 MWh batteries and installed over 50 MW of charging infrastructure.[11] Proterra Energy is one of the three business segments, it focuses on turn key charging solutions for commercial fleet and energy management, including V2G functionality.

Stem (STEM, down 24.72% in July, up 0.22% YTD) Founded in 2009, the 5th California based new constituent delivers AI driven clean energy storage systems. It is the only listed pure player in terms of Storage Capacity Commissioned (over 600 MWh from 2014 to 2020, behind only Hyundai Electric, ahead of Tesla, NEC and Fluence Energy).[12] It went public via a SPAC announced in December 2020 that closed last April, valuing the company at $1.35 billion.[13] Its “energy storage as a service” are both in front of and behind the meter. Commercial and industrial customers achieve cost reductions via reducing their usage of power at peak times, while enabling the growth of onsite renewable energy generation while participating in the wholesale and grid services markets where available.

Luoyang Glass Co (1108.HK, up 56.41% in July, up 42.20% YTD) The Chinese maker of electronic glass substrates is a leading maker of photovoltaic glass and silica sand, distributing its products mainly into the Chinese market.[14] Benefiting from increase in sales, the company announced expected net profit to grow between 4.5 and 5.3 times year over year.[15] According to the China News, the company's photovoltaic glass business represents 85% of overall sales. Its ultra-white high transmittance solar photovoltaic module cover plate and backplane glass lines benefit from well acceptance by the major photovoltaic module manufacturers.

Novozymes (NZM2.BE, up 1.9% in July, up 36.57% YTD) The Danish company focuses on research, development and production of industrial enzymes, microorganisms, and biopharmaceutical ingredients. They operated and report along five business lines.[16]  Household Care (representing 33% of sales) we do not deem to be green revenue), but the other segments enable decarbonisation: Food, beverages and human health (representing 23% of sales) are solutions that improve yields and save energy and water during industrial processing; Bioenergy (15% of sales), supplying enzymes and yeasts are critical for converting grains and straw into fuel ethanol; Grain & Tech Processing (16% of sales), also improving yields and saving energy; and Agriculture, Animal Health & Nutrition (13% of sales).

Oatly (OTLY, down 28.52% in July, down 8.56% YTD) The Swedish sustainable food company highlights the environmental benefits of its products, as a key selling point for its solutions, claiming that today animal based products account for 60% of global CO2e food emissions, although supplying only 18% of calories.[17] The company has grown revenue at an 86% CAGR from 2018 to 1Q21, based on 7 categories of products, being present in 20 different markets.[18] Oatly will be launching 9 additional production facilities until 2023, allowing capacity to grow from 299 million liters in 2020 to 1.4 billion liters by 2023. The company IPOed last May at a $10 billion valuation.[19]

Shoals Technologies Group (SHLS, down 12.38% in July, down 16.39% YTD) The last addition to our flagship fund was also a recent IPO story. The Tennessee based balanced of electrical balance of systems (EBOS) solutions for utility scale solar projects, with products deployed in over 20 GW of solar projects globally.[20] Shoals claims to be the first company in the industry to commercialize “plug-n-play” EBOS systems, using simple push connectors as opposed to wire “crimps” used in conventional systems. The CAGR in revenues from 2018 to 2020 was above 30%.[21]

Past performance is no guarantee of future performance. Source of all data: Bloomberg. Data as of 30.07.21

 

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