Investor interest in waste reduction and recycling is rising steadily, according to an investment manager. | Sittipong Phokawattana/Shutterstock
As aspirations for a circular economy continue to gain traction, some financial index providers are urging investors to take notice of what they call an emerging opportunity.
Rahul Sen Sharma, managing partner at global firm Indxx, said he’s seeing a lot of curiosity about green investment and the circular economy, and “we think this is one of those things that will become more and more important.”
“It’s steadily growing in interest. People are starting to realize the importance of it more and more, from not only an environmental perspective, but purely a monetary perspective as well,” he said. “You save time, save money, save resources and it makes money for people.”
As more companies and countries aim to reduce their waste and greenhouse gas emissions, Sen Sharma said investment in the sectors “could be truly transformative” for both the industries and society.
Following that trend, Indxx last year created a U.S. Circular Economy Index. It has the 10 largest companies that get a majority of their revenue from five areas: sustainability of resources; sharing platforms; resource recovery; product as a service; and life cycle extension. The related World Without Waste Exchange-Traded Fund (ETF) has the New York Stock Exchange ticker WWOW. Indxx also has a Global Circular Economy Index.
Some of the companies in the index include US Ecology, Enphase Energy, CarGurus, SunPower, Airbnb, Casella Waste Systems, eBay, Etsy, Netflix, Republic Services, Tesla, WM and Zoom, among others.
Sen Sharma said sustainability of resources includes companies providing renewable energy or energy efficiency, such as batteries. Sharing platforms include companies that increase utilization rates of products with shared use or shared ownership, such as peer-to-peer lending, collaboration platforms and software.
Resource recovery refers to what’s more traditionally known as waste management, he said, getting “useful resources or energy out of discarded products or byproducts.” That’s not just recycling, Sen Sharma added, but also companies that do water purification and use the waste product for something new.
The product-as-a-service area is for subscription companies, and life cycle extension companies include those that deal in reselling or trading goods and repair services.
“I don’t want to say we’re experts on this – we’re not – but we’ve identified this as a very interesting opportunity,” Sen Sharma said, adding that Indxx is “pretty happy” with how the EFT has performed thus far.
Indxx likes to focus on big-picture trends that could be disruptive, Sen Sharma said, and in the past has created indexes based on natural resources, robots and AI, and the metaverse. The team identified the circular economy as one of those trends, because of “what we’re seeing from a reusing and waste perspective, and consumption in general.”
“We’re using significantly more resources than are sustainable,” Sen Sharma said. “That’s a big problem, and it’s going to get worse. Consumption overall will increase dramatically over the next 40 years.”
As capital markets can help kickstart the growth of new industries, Sen Sharma said he wanted to point investors toward the circular economy and not just more traditional green investing.
“There are a lot of articles lately that the venture capitalists are going to tech and NFTs, but this hard work is going to have to happen and circular economy does seem to be an investment case to be made,” he said.
Other firms are also moving into similar spheres. Recently, Spring Lane Capital, a private equity firm that targets sustainability solutions in the energy, food, water, waste and transportation industries, announced it had a second close of $50 million for its second private fund. It has invested in composting county Atlas Organics and in 7 Generation Capital for electric vehicle development, among others.
Sen Sharma said Indxx is looking to other countries that are on the leading edge of building a circular economy to predict what may happen in the U.S. in the near future. He foresees programs and infrastructure centered on increasing plastics recycling, reducing food waste and batteries.
“By 2030, 60% of all vehicles sold will be electric and we’re going to have to build a huge battery recycling infrastructure,” he said, and that means it will need investment.
OTTAWA – Canada’s unemployment rate held steady at 6.5 per cent last month as hiring remained weak across the economy.
Statistics Canada’s labour force survey on Friday said employment rose by a modest 15,000 jobs in October.
Business, building and support services saw the largest gain in employment.
Meanwhile, finance, insurance, real estate, rental and leasing experienced the largest decline.
Many economists see weakness in the job market continuing in the short term, before the Bank of Canada’s interest rate cuts spark a rebound in economic growth next year.
Despite ongoing softness in the labour market, however, strong wage growth has raged on in Canada. Average hourly wages in October grew 4.9 per cent from a year ago, reaching $35.76.
Friday’s report also shed some light on the financial health of households.
According to the agency, 28.8 per cent of Canadians aged 15 or older were living in a household that had difficulty meeting financial needs – like food and housing – in the previous four weeks.
That was down from 33.1 per cent in October 2023 and 35.5 per cent in October 2022, but still above the 20.4 per cent figure recorded in October 2020.
People living in a rented home were more likely to report difficulty meeting financial needs, with nearly four in 10 reporting that was the case.
That compares with just under a quarter of those living in an owned home by a household member.
Immigrants were also more likely to report facing financial strain last month, with about four out of 10 immigrants who landed in the last year doing so.
That compares with about three in 10 more established immigrants and one in four of people born in Canada.
This report by The Canadian Press was first published Nov. 8, 2024.
The Canadian Institute for Health Information says health-care spending in Canada is projected to reach a new high in 2024.
The annual report released Thursday says total health spending is expected to hit $372 billion, or $9,054 per Canadian.
CIHI’s national analysis predicts expenditures will rise by 5.7 per cent in 2024, compared to 4.5 per cent in 2023 and 1.7 per cent in 2022.
This year’s health spending is estimated to represent 12.4 per cent of Canada’s gross domestic product. Excluding two years of the pandemic, it would be the highest ratio in the country’s history.
While it’s not unusual for health expenditures to outpace economic growth, the report says this could be the case for the next several years due to Canada’s growing population and its aging demographic.
Canada’s per capita spending on health care in 2022 was among the highest in the world, but still less than countries such as the United States and Sweden.
The report notes that the Canadian dental and pharmacare plans could push health-care spending even further as more people who previously couldn’t afford these services start using them.
This report by The Canadian Press was first published Nov. 7, 2024.
Canadian Press health coverage receives support through a partnership with the Canadian Medical Association. CP is solely responsible for this content.
As Canadians wake up to news that Donald Trump will return to the White House, the president-elect’s protectionist stance is casting a spotlight on what effect his second term will have on Canada-U.S. economic ties.
Some Canadian business leaders have expressed worry over Trump’s promise to introduce a universal 10 per cent tariff on all American imports.
A Canadian Chamber of Commerce report released last month suggested those tariffs would shrink the Canadian economy, resulting in around $30 billion per year in economic costs.
More than 77 per cent of Canadian exports go to the U.S.
Canada’s manufacturing sector faces the biggest risk should Trump push forward on imposing broad tariffs, said Canadian Manufacturers and Exporters president and CEO Dennis Darby. He said the sector is the “most trade-exposed” within Canada.
“It’s in the U.S.’s best interest, it’s in our best interest, but most importantly for consumers across North America, that we’re able to trade goods, materials, ingredients, as we have under the trade agreements,” Darby said in an interview.
“It’s a more complex or complicated outcome than it would have been with the Democrats, but we’ve had to deal with this before and we’re going to do our best to deal with it again.”
American economists have also warned Trump’s plan could cause inflation and possibly a recession, which could have ripple effects in Canada.
It’s consumers who will ultimately feel the burden of any inflationary effect caused by broad tariffs, said Darby.
“A tariff tends to raise costs, and it ultimately raises prices, so that’s something that we have to be prepared for,” he said.
“It could tilt production mandates. A tariff makes goods more expensive, but on the same token, it also will make inputs for the U.S. more expensive.”
A report last month by TD economist Marc Ercolao said research shows a full-scale implementation of Trump’s tariff plan could lead to a near-five per cent reduction in Canadian export volumes to the U.S. by early-2027, relative to current baseline forecasts.
Retaliation by Canada would also increase costs for domestic producers, and push import volumes lower in the process.
“Slowing import activity mitigates some of the negative net trade impact on total GDP enough to avoid a technical recession, but still produces a period of extended stagnation through 2025 and 2026,” Ercolao said.
Since the Canada-United States-Mexico Agreement came into effect in 2020, trade between Canada and the U.S. has surged by 46 per cent, according to the Toronto Region Board of Trade.
With that deal is up for review in 2026, Canadian Chamber of Commerce president and CEO Candace Laing said the Canadian government “must collaborate effectively with the Trump administration to preserve and strengthen our bilateral economic partnership.”
“With an impressive $3.6 billion in daily trade, Canada and the United States are each other’s closest international partners. The secure and efficient flow of goods and people across our border … remains essential for the economies of both countries,” she said in a statement.
“By resisting tariffs and trade barriers that will only raise prices and hurt consumers in both countries, Canada and the United States can strengthen resilient cross-border supply chains that enhance our shared economic security.”
This report by The Canadian Press was first published Nov. 6, 2024.
