Fixing this water contaminant is a long-term opportunity for impact investors | Pendal Group
Hi there! Welcome to the new look Pendal website... Take a two minute tour to see what we’ve changed.

Mainstream Online Web Portal

Investors can view their accounts online via a secure web portal. After registering, you can access your account balances, periodical statements, tax statements, transaction histories and distribution statements / details.
Advisers will also have access to view their clients’ accounts online via the secure web portal.

Fixing this water contaminant is a long-term opportunity for impact investors

Impact investors are turning their attention to a human-made chemical that’s a big problem for water supplies. Regnan analyst Maxime Le Floch explains the opportunity

ABOUT 97 per cent of the world’s water is salty, or otherwise undrinkable.

The other 3 per cent needs to quench the thirst of nearly 8 billion people, water about 38 per cent of the global land surface to help grow crops and provide a myriad of other uses.

While it’s not always a scarce resource, water is limited. It needs to be appreciated as critical for life and fundamental to economic activity. It needs to be looked after.

Contaminants have always proven a major challenge for humans, and that’s only been exacerbated by urbanisation.

One particularly challenging contaminant is polyfluoroalkyl substances (PFAS). These are human-made chemical compounds that don’t otherwise occur in the environment.

They are very stable and resilient to breakdown — which is why they have been used extensively in industry and are now a problem in our waterways. In fact, it can take decades for the chemical bonds of PFAS to breakdown.

PFAS contamination was the cause of water contamination around the Williamtown air base in NSW in 2015, which triggered precautionary dietary advice and closure of fishing in the region.

A major problem for water supplies

Since the 1950s PFAS have been developed to make products resistant to heat, water, stains and fire. Most people have them in their homes in products such as carpet, food wrappers, non-stick cookware and fire-fighting products.

As a result, PFAS are now a major problem for water supplies.

“PFAS are problematic because they are widely used, highly persistent in the environment, bioaccumulate and biomagnify, are highly toxic across a range of human health factors, and are highly mobile,” says Regnan investment analyst Maxime Le Floch.

Le Floch is part of a four-person impact investment team at Pendal’s sustainable investment business Regnan. Maxime and his team manage the Regnan Global Equity Impact Solutions Fund.

“There are thousands of different PFAS. So far the regulatory focus has been on a subset of long-chain PFAS. But this is starting to change at least in Europe and Australia.”

Find out about

Regnan Global Equity Impact Solutions Fund

Long-chain PFAS have a chemical make-up of more than six carbons. Short chain PFAS have fewer.

The trend towards short chain might eventually exacerbate the problem because they are harder to treat, Le Floch says.

Impact investing opportunity

Treating water — and specifically PFAS in water — is a long-term opportunity for investors.

Depending on regulators — and how they set maximum allowable concentration of PFAS — it could be an opportunity worth tens of billions of dollars in the US alone, Le Floch says.

“PFAS can be treated with established technologies but needs to be customised to each site to be effective.

“The value chain includes site assessment, project management, water treatment and waste disposal. Site assessment and waste disposal are the most difficult parts of the value chain.”

Water treatment innovator Evoqua targets PFAS

One company working on treating PFAS is US-based Evoqua Water Technologies.

Municipal drinking water suppliers provide a big opportunity for Evoqua — as do airports and military bases, construction and commercial de-watering and industrial water.

Regnan Global Equity Impact Solutions Fund holds a stake in Evoqua.

Le Floch says Evoqua’s work is very promising. But it is a young industry and there is little built-up knowledge around remediation project economics.

“Project length is a key question, in particular the initial assessment and pilot-testing phase before the full treatment equipment is installed,” he says.

But as the wealth of knowledge increases — and the size of the challenge and the opportunity become more apparent — investing in treatment of PFAS could prove rewarding.


About Maxime Le Floch

Maxime is an analyst with Regnan’s impact investment team. He focuses on Regnan Global Equity Impact Solutions Fund. Maxime has more than 10 years of experience in sustainable investment. Before joining Regnan he was an investment analyst with Hermes where he helped launch and manage the Hermes Impact Opportunities Equity Fund.

About Regnan

Regnan is a responsible investment leader with a long and proud history of providing insight and advice to investors with an interest in long-term, broad-based or values-aligned performance.

Building on that expertise, in 2019 Regnan expanded into responsible investment funds management, backed by the considerable resources of Pendal Group.

The Regnan Global Equity Impact Solutions Fund invests in mission-driven companies we believe are well placed to solve the world’s biggest problems.

The Regnan Credit Impact Trust (available in Australia only) invests in cash, fixed and floating rate securities where the proceeds create positive environmental and social change. Both funds are distributed by Pendal in Australia.

Visit Regnan.com

Find out about Regnan Global Equity Impact Solutions Fund

Find out about Regnan Credit Impact Trust

For more information on these and other responsible investing strategies, contact Head of Regnan and Responsible Investment Distribution Jeremy Dean at jeremy.dean@regnan.com.


Regnan is a standalone responsible investment business division of Pendal Group Limited (Pendal). Pendal is an Australian-listed investment manager and owner of the J O Hambro Capital Management Group. Regnan’s focuses is on delivering innovative solutions for sustainable and impact investment, leaning on over more than 20 years of experience at the frontier of responsible investment. “Regnan” is a registered trademark of Pendal. The Regnan business consists of two distinct business lines. The investment management business is based in the United Kingdom and sits within J O Hambro Capital Management Limited, which is authorised and regulated by the Financial Conduct Authority and is registered as an investment adviser with the SEC. “Regnan” is a registered as a trading name of J O Hambro Capital Management Limited. The investment team manages the Regnan Global Equity Impact Solutions (RGEIS) strategy, which aims to generate market-beating long-term returns by investing in solutions to the world’s environmental and societal problems. The RGEIS strategy is distributed in Australia by Pendal Fund Services Limited. Alongside the investment team is the Engagement, Advisory and Research (EAR) team of Pendal Institutional Limited in Australia, which has a long history of providing services on environmental, social and governance issues. While the investment management team will often draw on services from and collaborate with the EAR team, they remain independent of the EAR team and are solely responsible for the investment management of the RGEIS strategy. The Regnan Credit Impact Trust (available in Australia only) invests in cash, fixed and floating rate securities where the proceeds create positive environmental and social change. Regnan Credit Impact Trust is distributed in Australia by Pendal. This article has been prepared by Pendal Fund Services Limited (PFSL) ABN 13 161 249 332, AFSL No 431426 and the information contained within is current as at August 18, 2021. It is not to be published, or otherwise made available to any person other than the party to whom it is provided. PFSL is the responsible entity and issuer of units in the Regnan Global Equity Impact Solutions Fund (ARSN 645 981 853). A product disclosure statement (PDS) is available for the Fund and can be obtained by calling 1800 813 886 or visiting www.pendalgroup.com. You should obtain and consider the PDS before deciding whether to acquire, continue to hold or dispose of units in the Fund. An investment in the Fund is subject to investment risk, including possible delays in repayment of withdrawal proceeds and loss of income and principal invested. This article is for general information purposes only, should not be considered as a comprehensive statement on any matter and should not be relied upon as such. It has been prepared without taking into account any recipient’s personal objectives, financial situation or needs. Because of this, recipients should, before acting on this information, consider its appropriateness having regard to their individual objectives, financial situation and needs. This information is not to be regarded as a securities recommendation. The information in this article may contain material provided by third parties, is given in good faith and has been derived from sources believed to be accurate as at its issue date. While such material is published with necessary permission, and while all reasonable care has been taken to ensure that the information in this article is complete and correct, to the maximum extent permitted by law neither PFSL nor any company in the Pendal group accepts any responsibility or liability for the accuracy or completeness of this information. Performance figures are calculated in accordance with the Financial Services Council (FSC) standards. Performance data (post-fee) assumes reinvestment of distributions and is calculated using exit prices, net of management costs. Performance data (pre-fee) is calculated by adding back management costs to the post-fee performance. Past performance is not a reliable indicator of future performance. Any projections contained in this article are predictive and should not be relied upon when making an investment decision or recommendation. While we have used every effort to ensure that the assumptions on which the projections are based are reasonable, the projections may be based on incorrect assumptions or may not take into account known or unknown risks and uncertainties. The actual results may differ materially from these projections.

The Target Market Determination (TMD) for the Fund is available at www.pendalgroup.com/ddo. You should obtain and consider the PDS and the TMD before deciding whether to acquire, continue to hold or dispose of units in the Fund.

Keep updated
Sign up to receive the latest news and views