2021 added one more year of extremes to the record book. Mid-summer, devastating floods hit Germany, France and Belgium costing hundreds of lives and causing billions of euros in damage to residential homes, commercial buildings and municipal infrastructure. In the Henan province of central China, flood waters pushed reservoirs to overflowing, inundated streets and even gushed into underground carparks and subway tunnels, overtaking vehicles and commuters.1 Hurricane Ida hammered the US and ranked as the costliest natural disaster of 2021. Ida’s impact was felt as far north as Canada which again suffered unprecedented flooding just a few months later when storms hit its western province of British Columbia. Extreme rains and catastrophic floods also swelled in Japan, Indonesia, Nepal, Pakistan and India.2
2022 is looking to be a repeat, with record rains and ferocious floods are already wrecking lands and lives in southeastern Australia.
Climate scientists predict that global warming is changing weather patterns, making catastrophic flooding more unpredictable, more frequent and more costly. Since 2000, flood-related disasters have increased by 134%, compared with the two previous decades.3 Flood incidence, damage and costs are rising amounting to losses in the double-digit billions, and overall economic losses totaling in the hundreds of billions, annually.4 With USD 135 billion in damages, floods and storms caused the most economic losses in 2021.5
Since 2000, flood-related disasters have increased by 134%, compared with the two previous decades
The mounting costs of extreme weather expose the vulnerability of many municipal water systems and underscore the need for investments in water infrastructure. Over the years many urban areas have underinvested in water infrastructure; building flood and climate resilience will mean reversing that trend.
The average age of 2.6 million kilometers of water and sewer pipes in the United States is almost 50 years old, with portions stretching back more than a century.6 The American Society of Civil Engineers gave the US stormwater infrastructure a dismal D on a scale of A to F and estimates an investment gap of 8 billion annually just to comply with current regulations.7 Investments in climate resilience will run even higher. System-wide, to close the water infrastructure gap, investments will need to reach USD 109 billion annually, or over 2 trillion by 2040.8 Biden’s recently passed infrastructure bill which devotes nearly USD 50 billion in funding to modernize aging drinking water, stormwater, and wastewater systems will help but still falls short.9,10
The mounting costs of extreme weather expose the vulnerability of many municipal water systems and underscore the need for investments in water infrastructure
The US is not alone. Segments of the EU’s seven million kilometers of pipes have been in operation since the first World War. Policymakers complain that investment in water infrastructure is not keeping pace with 21st century challenges which in addition to climate change, include population growth and rapid urbanization. An EU report from 2019 estimated flood-related losses in member states to range between EUR 20-30 billion in the 2020s. Losses from 2021 floods in Germany alone were EUR 40 billion, meaning member states have woefully underestimated the cost of future damage.11,12
All told, the OECD estimates that to achieve sustainable economic growth and development (from flood protection to safe and equitable access), global investments in water infrastructure should reach USD 6.7 trillion by 2030.13
The rising incidence of hurricanes, cyclones and typhoons along with rising sea levels, mean the risk of inaction for urban areas along coastlines are accelerating faster then the average.
The island city-state of Singapore is one of the world’s most advanced in developing water management solutions. In addition to a dense network of drains, reservoirs and catchment areas that collect and re-distribute rain waters, local water utilities are also investing in state-of-the-art technologies to help monitor and react to storms in real-time. Storm radar tracks offshore rain volumes while sensors in pipes and valves monitor water network pressure, volume, and quality so loads in mains, pipes and reservoirs can be shifted to maintain system balance. Similar approaches are being advocated in the US, EU to ensure the municipal water infrastructure is climate prepared.
As an alternative to traditional flood resistance infrastructure, coastal cities like Hong Kong and San Francisco are implementing natural solutions to improve climate resilience. Both are developing open green spaces inside city interiors as well as on waterfront borders that act as parks in the dry season but function as massive sponges to soak up excess waters in stormy ones. Washington DC’s water utility recently completed a massive USD 2.6 billion project that combined both innovative green and traditional gray water management measures to keep floodwaters from polluting the Chesapeake Bay. Gray measures included installing underground diversion tunnels while green methods included installing vegetated roofs, permeable pavements, and bioswales (entrenchments along borders to collect runoff) in key areas throughout the city.
Whether green or gray, investing in water infrastructure is capital-intensive early on but given the exponential costs related to climate change, the cost of inaction far exceeds the cost of prevention. Extreme events, together with their extreme costs, are moving from outliers to the norm. To protect not only water supplies but public and private assets, municipalities and companies (many of which operation their own water utilities) should fortify their defenses now.
From smart sensors and precision analytics to massive mains and tunnels, advanced wastewater management to natural watershed maintenance, companies all along the water value chain are providing private companies and public utilities with climate-adaptive solutions that protect water supplies, public infrastructure and human health. Investments in water help dampen climate risk, strengthen climate resilience and keep urban growth and development safely afloat.
1“Death toll triples to more than 300 in recent China flooding.” Associated Press, 2. August 2021.
2“The State of Climate Services 2021: Water.” World Meteorological Organization. https://public.wmo.int/en/media/press-release/wake-looming-water-crisis-report-warns
4Swiss Re. News Release. 14. Dec 2021. “Global insured catastrophe losses rise to USD 112 billion in 2021.” https://www.swissre.com/media/news-releases/nr-20211214-sigma-full-year-2021-preliminary-natcat-loss-estimates.html
5Munich Re, NatCat Service, Report on Natural Catastrophes 2021.
6“The $300 Billion War Beneath the Street. Fighting to Replace America’s Water Pipes” 10 November 2017. New York Times. https://www.nytimes.com/2017/11/10/climate/water-pipes-plastic-lead.html
7“2021 Report Card for America’s Infrastructure.” 2021. https://stormwater.wef.org/2021/03/stormwater-receives-a-d-in-first-ever-asce-report-card-appearance/
8“The Economic Benefits of Investing in Water Infrastructure.” Report 2020. Value of Water Campaign, 2020. US Water Alliance, American Society of Civil Engineers, EBP, Downstream Strategies.
9“Biden Signs Infrastructure Bill with Funding Boosts for the Water Sector.” 12 Nov 2021. Water Finance and Management.
10“Major US Infrastructure Package to Address Stormwater Sector Needs.” 1. September 2021. Water Environment Federation (WEF) Stormwater Report. https://stormwater.wef.org/2021/09/major-u-s-infrastructure-package-to-address-stormwater-sector-needs/
11Z.W. Kundzewicz, P. Licznar. “Climate change adjustments in engineering design standards: European perspective.” Water Policy 2021. https://iwaponline.com/wp/article/23/S1/85/84955/Climate-change-adjustments-in-engineering-design
12“German Floods Cost a Record USD 40 Billion, Munich Re Estimates.” Bloomberg. 10. Jan. 2022. https://www.bloomberg.com/news/articles/2022-01-10/german-floods-cost-a-record-40-billion-munich-re-estimates
13“Financing Water: Investing in sustainable growth.” OECD Environment Policy Paper, No. 11. 2018.
The contents of this document have not been reviewed by the Securities and Futures Commission ("SFC") in Hong Kong. If you are in any doubt about any of the contents of this document, you should obtain independent professional advice. This document has been distributed by Robeco Hong Kong Limited (‘Robeco’). Robeco is regulated by the SFC in Hong Kong.
This document has been prepared on a confidential basis solely for the recipient and is for information purposes only. Any reproduction or distribution of this documentation, in whole or in part, or the disclosure of its contents, without the prior written consent of Robeco, is prohibited. By accepting this documentation, the recipient agrees to the foregoing
This document is intended to provide the reader with information on Robeco’s specific capabilities, but does not constitute a recommendation to buy or sell certain securities or investment products. Investment decisions should only be based on the relevant prospectus and on thorough financial, fiscal and legal advice. Please refer to the relevant offering documents for details including the risk factors before making any investment decisions.
The contents of this document are based upon sources of information believed to be reliable. This document is not intended for distribution to or use by any person or entity in any jurisdiction or country where such distribution or use would be contrary to local law or regulation.
Investment Involves risks. Historical returns are provided for illustrative purposes only and do not necessarily reflect Robeco’s expectations for the future. The value of your investments may fluctuate. Past performance is no indication of current or future performance.
Please read this information carefully.
This website is prepared and issued by Robeco Hong Kong Limited ("Robeco"), which is a corporation licensed by the Securities and Futures Commission in Hong Kong to engage in Type 1 (dealing in securities); Type 4 (advising in securities) and Type 9 (asset management) regulated activities. The Company does not hold client assets and is subject to the licensing condition that it shall seek the SFC’s prior approval before extending services at retail level. This website has not been reviewed by the Securities and Futures Commission or any regulatory authority in Hong Kong.
2. Important risk disclosures
2. Important risk disclosures Robeco Capital Growth Funds (“the Funds”) are distinguished by their respective specific investment policies or any other specific features. Please read carefully for the risks of the Funds:
3. Local legal and sales restrictions
The information contained in the Website is being provided for information purposes.
Neither information nor any opinion expressed on the Website constitutes a solicitation, an offer or a recommendation to buy, sell or dispose of any investment, to engage in any other transaction or to provide any investment advice or service. The information contained in the Website does not constitute investment advice or a recommendation and was prepared without regard to the specific objectives, financial situation or needs of any particular person who may receive it. An investment in a Robeco product should only be made after reading the related legal documents such as management regulations, prospectuses, most recent annual and semi-annual reports, which can be all be obtained free of charge at www.robeco.com/hk/en and at the Robeco Hong Kong office.
4. Use of the Website
The information is based on certain assumptions, information and conditions applicable at a certain time and may be subject to change at any time without notice. Robeco aims to provide accurate, complete and up-to-date information, obtained from sources of information believed to be reliable. Persons accessing the Website are responsible for their choice and use of the information.
5. Investment performance
No assurance can be given that the investment objective of any investment products will be achieved. No representation or promise as to the performance of any investment products or the return on an investment is made. The value of your investments may fluctuate. The value of the assets of Robeco investment products may also fluctuate as a result of the investment policy and/or the developments on the financial markets. Results obtained in the past are no guarantee for the future. Past performance, projection, or forecast included in this Website should not be taken as an indication or guarantee of future performance, and no representation or warranty, express or implied, is made regarding future performance. Fund performance figures are based on the month-end trading prices and are calculated on a total return basis with dividends reinvested. Return figures versus the benchmark show the investment management result before management and/or performance fees; the fund returns are with dividends reinvested and based on net asset values with prices and exchange rates of the valuation moment of the benchmark.
Investments involve risks. Past performance is not a guide to future performance. Potential investors should read the terms and conditions contained in the relevant offering documents and in particular the investment policies and the risk factors before any investment decision is made. Investors should ensure they fully understand the risks associated with the fund and should also consider their own investment objective and risk tolerance level. Investors are reminded that the value and income (if any) from shares of the fund may be volatile and could change substantially within a short period of time, and investors may not get back the amount they have invested in the fund. If in doubt, please seek independent financial and professional advice.
6. Third party websites
This website includes material from third parties or links to websites maintained by third parties some of which is supplied by companies that are not affiliated to Robeco. Following links to any other off-site pages or websites of third parties shall be at the own risk of the person following such link. Robeco has not reviewed any of the websites linked to or referred to by the Website and does not endorse or accept any responsibility for their content nor the products, services or other items offered through them. Robeco shall have no liability for any losses or damages arising from the use of or reliance on the information contained on websites of third parties, including, without limitation, any loss of profit or any other direct or indirect damage. Third party off-site pages or websites are provided for informational purposes only.
7. Limitation of liability
Robeco as well as (possible) other suppliers of information to the Website accept no responsibility for the contents of the Website or the information or recommendations contained herein, which moreover may be changed without notice.
Robeco assumes no responsibility for ensuring, and makes no warranty, that the functioning of the Website will be uninterrupted or error-free. Robeco assumes no responsibility for the consequences of e-mail messages regarding a Robeco (transaction) service, which either cannot be received or sent, are damaged, received or sent incorrectly, or not received or sent on time.
Neither will Robeco be liable for any loss or damage that may result from access to and use of the Website.
8. Intellectual property
All copyrights, patents, intellectual and other property, and licenses regarding the information on the Website are held and obtained by Robeco. These rights will not be passed to persons accessing this information.
10. Applicable law
The Website shall be governed by and construed in accordance with the laws of Hong Kong. All disputes arising out of or in connection with the Website shall be submitted to the exclusive jurisdiction of the courts of Hong Kong.