NN Investment Partners has highlighted the potential size of the world’s sanitation market as a key focus of impact investing objectives.
Citing the LIXL Group Corporation’s true cost of sanitation report, NNIP says poor sanitation has shaved an average 0.9% off the GDP of countries impacted – a ratio that has risen from 0.7% five years ago.
India alone is estimated to have lost the equivalent of $106.7bn from its GDP in 2015, linked to public health issues and economic losses.
Investor opportunities therefore lie in private sector responses, such as promotion of water recycling by Hindustan Unilever in India, or Lixil Group’s ‘Safe Toilet’ developed for regions where water is scarce. Lixil’s product has been introduced to 10 countries, with a sales target currently on 1 million units in India.
Huub van der Riet, lead portfolio manager, Impact Investing at NN Investment Partners, said: “Sanitation is about promoting health to communities by providing a clean environment and breaking the cycle of disease spreading. Clean sanitation will undoubtedly have a positive impact on the economic output and GDP of developing countries. Investing in projects and companies designed to promote this is an opportunity for investors to support positive social change across the world and achieve attractive returns.”
“The NN Impact Opportunities Equity Investment Strategy invests in listed equities of companies that offer material, intentional and transformational solutions for key global challenges alongside a financial return. The companies NN IP invests in typically have strong innovative business models with attractive returns, a healthy growth outlook and show a real potential to positively transform their environments. As these companies develop products and offerings to alleviate the effects of poor sanitation on the world’s population, there is a great opportunity for institutional impact oriented investors in this space.”