Thomas Schumann Capital | Council for Inclusive Capitalism

Established in 2011, Thomas Schumann Capital (TSC) has emerged as a leading investor in sustainable freshwater management and global water security. Recognizing the critical importance of water as a fundamental human right and indispensable resource, TSC developed innovative strategies and investment solutions to safeguard freshwater supplies for future generations. Three of TSC's most ambitious projects, Project Greenland, Project Alaska, Project Iceland steward a staggering 140 trillion liters super premium Arctic freshwater supply for drinking, humanitarian relief, industrial, commercial uses in water-stressed regions. With government freshwater exploration licenses and strategic partnerships in place, these groundbreaking endeavors not only immediately address long-term freshwater supply and security concerns but also revolutionize the way freshwater resources are managed and distributed to water-stressed regions.

For global capital markets TSC introduced innovative financial instruments to appreciate water security, including TSC Water Security Index, the world's first index family to quantify and qualify water risk in equities. The index is now complemented by TSC Global Water Security ETF launching this summer. In addition to enjoying partnerships with enlightened investors who share its vision of water stewardship and sustainability, TSC now expands its coalition to sovereigns and sovereign wealth funds to advance global water security and sustainability. As the global water and climate challenges continue to escalate, Thomas Schumann Capital's bold vision and unwavering commitment to United Nations Sustainable Development Goal 6 "Access to Clean Water for All" and Agenda 2030 pave the way towards a more water-secure, sustainable and equitable future for 8 billion stakeholders.

Purpose

Thomas Schumann Capital’s purpose-driven mission and investment products advance Water Security, United Nations Sustainable Development Goal #6 in public and private markets.

Thomas Schumann

Principal, Thomas Schumann Capital

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Summary

Activities & Initiatives

Thomas Schumann Capital® promotes Water Security, United Nations Sustainable Development Goal 6 in public and private markets. The firm aims to link more than $10,000,000,000 in assets to its benchmark equity indices by 2025. Thomas Schumann Capital® is the world's leading IP, index, fund sponsor for Water Security. TSC licenses TSC Water Security Index® Global, US, and Euro. The ESG benchmark index family for Water Stewardship outperforms MSCI World, S&P500, S&P Euro 75, EuroSTOXX 50 on a financial, Water and carbon footprint basis. Thomas Schumann Water Security Fund® is an impact fund that allocates venture philanthropy to Water ventures that provide access to clean Water, energy and self-reliance globally.

Measures & Targets

Minimising Water risk in investments

TSC was founded in 2011 by Thomas Schumann. A world-leading solutions provider of water security and responsible investing, the company’s goals are aligned with UN Sustainable Development Goal 6: ‘Ensure availability and sustainable management of water and sanitation for all’.

TSC’s mission is to provide investors, asset managers and financial institutions with the tools and transparency they need to incorporate financial water risk into investment strategies, enabling them to achieve sustainable equity market performance.

Water usage and stewardship are a source of major financial risk that is largely absent from equity valuations today. This risk directly translates to earnings risk which can negatively impact stock prices and investment performance in the future. If water risk remains unaccounted for in benchmarks, investors have little or no reliable means to reduce exposure to companies with high water risk.

TSC’s aim was to quantify water risk and build company rankings fuelled by data on water utilisation, water stewardship and environmental controversies. To do this, they set out to launch the world’s first water security indices.

To achieve this aim, collaboration with a leading water and sustainability data provider was essential to provide the rich data and unrivalled expertise required to create a ground-breaking index methodology.

The TSC Water Security Index® Family are equity benchmark indices which measure the performance of large capitalisation stocks, weighted by their exposure to Water Risk, as quantified by a proprietary methodology sponsored by TSC and designed by Anatase Ltd. Constituents with lower Water Risk are over-weighted while those with higher Water Risk are underweighted. The TSC Water Security Index® Family provides a liquid, investible underlying for investment products that offer high correlation to the equity markets while significantly reducing Water Footprint in order to advance responsible investing, and UN SDG 6 “Water Security” in global capital markets.

The outcome: the world’s first water security indices

After normalising and scaling the Refinitiv water data, TSC was able to design a suite of water security indices for the US and Eurozone with a global index planned for the second half of 2021:

1. The TSC US Water Security Index®
2. The TSC Euro Water Security Index® 3. The TSC Global Water Security Index®

Once water risk is quantified, it informs index constituent weightings. The company has also leveraged the digital platform of index administration innovators, Moorgate Benchmarks in London, so that global investors can access the indices in real time.

The bonus: lower carbon footprint

Discussions with a leading US asset manager for purposes of launching TSC Water Security UCITS discovered that an unexpected benefit of good water stewardship is a lower carbon footprint – which is logical when considering that companies who manage their water well also target better carbon efficiency. The TSC Water Security Indices carbon footprint is 49% lower in the Eurozone and 20% lower in the USA than their equity benchmarks.

Tapping into Refinitiv’s high-quality data, market-leading expertise and superior technology, TSC has sponsored a ground-breaking range of investable indices that helps advance the financial community by providing greater exposure to low-water-risk and lower carbon emissions thereby addressing SDG 6 (Clean Water) as well as SDG 13 (Climate Action).

The TSC Water Security Indices can be invaluable to a broad spectrum of financial professionals, used as the foundation of innovative financial instruments that meet global demand for responsible investment. Moreover, they can help clients gain a better understanding of climate and water risk.

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