The Worrying Switch: Measurements Aren’t Targets

by | Nov 9, 2022

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By Lenka Martinek, managing partner, Sustainable Market Strategies

The number of significant climate change events has skyrocketed in 2022, from water scarcity to forest fires to intense, stifling heat waves. News coverage of such events is also heating up, with many commentators weighing in on what to do to address these issues.  

Take for instance The Economist’s summer series on ESG. The editors propose ignoring social and governance challenges to focus solely on “E”. But by “E”, they mean Emissions, not the Environment. 


Goodhart’s Law is the notion that when a measure becomes a target, it ceases to be a good measure. With this in mind, focussing solely on emissions, to us, is not the right prescription.

Consider Volkswagen’s emissions scandal: when the US Environmental Protection Agency set strict emissions targets, Volkswagen intentionally programmed its turbocharged diesel engines to activate their emissions controls only during laboratory testing, However, in real-world driving conditions they emitted up to 40 times more greenhouse gases. By making the government agency’s measurement of emissions its target, Volkswagen effectively gamed the system.

Beyond this critique, it should be clear that reducing environmental concerns to one single measure – emissions – will not in any way ensure that Earth’s resources will be intact for future generations.  


Measuring – and reducing – CO2 emissions cannot, on its own, fix regional and national water crises, slow biodiversity loss or restore soil fertility.

Avoiding ‘Carbon Tunnel Vision’

The Economist isn’t alone in falling into the trap of what Jan Konietzko calls ‘Carbon tunnel vision’, the narrow focus on carbon emissions. Instead, we believe it is essential to incorporate broader, industry recognised objectives to identify Environmental Impact Opportunities.


We use the EU Taxonomy for Sustainable Activities – an organisation designed to prevent Greenwashing –  to underpin our objectives for environmentally sustainable business activities[1]. They are:

  1. Climate change mitigation
  2. Climate change adaptation
  3. Transition to a circular economy
  4. Pollution prevention and control
  5. Sustainable use and protection of water and marine resources
  6. Protection and restoration of biodiversity and ecosystems

This thematic classification was the inspiration behind our work with Rize ETF to develop its Environmental Impact 100 UCITS ETF, which invests in companies underpinned by the above environmentally sustainable business activities. This includes leaders and innovators across clean water, EVs, renewables and hydrogen, energy efficiency, waste and the circular economy and nature-based solutions.

Climate Change and So Much More

It is undeniable that businesses, and those who invest capital, must adapt their practices to meet the pressing challenges of a dramatically changing climate and environment.

A greener future tomorrow means investing in the most promising companies today that can manifest their sustainable ideas into productive realities. Thankfully, in recent years, a groundswell of societal awareness has given rise to technological innovation that seeks to tackle the challenges. 

Here are two such companies, included in the Rize Environmental Impact 100 UCITS ETF.  

  • Great Lakes Dredging and Docking

One major preoccupation for investors today – beyond emissions – is the rise in sea levels and increasing damage to our coastlines due to more frequent, severe weather events. Indeed, 65% of the world’s megacities are within 100 kilometres and 50 meters elevation of the coast.[1]

Great Lakes Dredging and Docking is the leading provider of dredging services in the United States specialising in projects that help improve and protect infrastructure and coastlines.Their projects include shoring up 130 miles of New Jersey Atlantic coastline by borrowing sand from an offshore source and pumping it ashore to replenish the beach, and the coast’s dune and berm systems as part of storm risk mitigation efforts. Other projects involve protecting marshhabitat for aquatic species and migratory birds.[2]

  • Kurita Water Industries

A second environmental preoccupation for investors today is water scarcity. As the global population increases, and resource-intensive economic development continues, many countries’ water resources and infrastructure are failing to meet rising demand for clean water. Currently, 2.3 billion people live in water-stressed countries. 

While developing countries have historically suffered more acute water shortages, water management is increasingly a challenge in developed nations too.[3]Indeed, given recent droughts, this topic is increasingly top of mind for investors, policymakers and regulators alike.

Kurita Water Industries is one of the world’s largest suppliers of water treatment equipment, chemistries and services. It provides systems to recycle water, reduce waste, convert waste into fuel and provide equipment to improve the efficiency of boilers and cooling equipment. 

Through its products and services, Kurita’s clients can reduce the feed water volume of their operations by optimising and managing water quality (principally in boiler systems) and recirculating water in cooling water systems, as well as recovery and reuse of wastewater. As Kurita’s revenue grows, more water is being saved.


There’s no doubt that meeting the world’s multiple environmental challenges will be a complex, multi-faceted task. Ensuring that we can meet our own needs without compromising the ability of future generations to meet theirs urgently requires tackling climate change and our most critical environmental challenges. That means reducing our dependence on fossil fuels, but it also means addressing other urgent natural resource challenges. 

[1] Glasow, R. & Jickells, T. & Baklanov, Alexander & Carmichael, Gregory & Church, T. & Gallardo, Laura & Hughes, Claire & Kanakidou, M. & Liss, P. & Mee, Laurence & Raine, Robin & Ramachandran, Purvaja & Ramachandran, Ramesh & Sundseth, K. & Tsunogai, Urumu & Uematsu, Mitsuo & Zhu, Tianjie. Megacities in the Coastal Zone.  Royal Swedish Academy of Science (2012).

[2] Great Lake Dredge & Dock. Coastal Protection and Restoration http://gldd-projects

[3] United Nations. UN Water Summary Progress Update 2021 Water Scarcity | UN-Water (

[1] Morningstar, “EU Taxonomy of Sustainable Activities”, 2022. Available at:

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