COP31 opened in Antalya on Monday, bringing governments together to discuss how to turn climate commitments into action.¹ We hope it succeeds. International agreements matter, even if their effect on companies takes years to emerge. Yet six days earlier, a quieter set of decisions in the United States offered a reminder of where those costs can first appear. 

On 3 November, Americans voted on 41 local measures affecting data centre development. In 40 contests, voters favoured limits or rejected proposals that would have supported new developments.² Ohio accounted for 21 measures. The one contest that went the other way was in Harwood, North Dakota. Not all these votes were binding, but the message was hard to miss: local communities are increasingly asking what large projects will demand of their land, power networks and water supplies. 

There is no contradiction between Antalya and a county hall in Ohio. International agreements help set expectations; local decisions determine what can actually happen, how quickly and at what cost. A conference cannot approve a planning application or create spare capacity on a grid. That falls to people and institutions much closer to the project. For investors, the distinction matters because the financial consequences often arrive one company and one site at a time. 

We spend a great deal of time forecasting interest rates, oil prices, currencies and earnings. Nobody models the county hall on a Tuesday evening. Yet a rejected application, a water shortage or an expensive grid connection can change the economics of an investment as surely as a move in borrowing costs. 

The market provided a sharp illustration of this uncertainty on 5 November. The Nasdaq Composite fell 5.5% and the Philadelphia Semiconductor Index lost about 12%.³ There were several explanations, including disappointing earnings, positioning and concern about the pace of technology investment. I would not blame local ballot papers. They did, however, draw attention to a question that applies far beyond data centres: what happens when the demand for a product is strong but the resources needed to deliver it are not readily available? 

The answer differs by location. Some businesses face water stress; others depend on unreliable electricity, constrained transport networks or lengthy approvals. These are not abstract environmental issues. They affect production, operating costs and sometimes whether a project goes ahead at all. This matters across markets where operating conditions differ sharply. A company that produces more output with less water, energy or waste may be better able to absorb a rise in costs or a disruption in supply. 

Our research team has been examining these differences across developed and emerging markets. We are testing where the gaps between more and less resource-efficient companies are greatest, how they vary by sector, and whether they offer information beyond conventional financial measures. We should not assume that efficiency always leads to stronger returns. Valuation and market conditions still matter. But understanding what a business needs to operate gives us a better basis for judging its resilience.  

This research also raises a practical question: how do we make sure the portfolio reflects it? We favour businesses that generate more economic output per unit of carbon, water and waste, relative to others in their sector. Those positions are generally modest. Together, they are intended to express a consistent view rather than a large bet on any single name. 

Keeping positions modest becomes difficult when one holding grows so large that its movements outweigh many smaller decisions. We have therefore tightened our portfolio construction rules to limit the influence of individual companies, particularly where their resource-related costs are significant. This is not a promise of better performance. There will be periods when a handful of market leaders continue to rise and those limits hold us back. We accept that trade-off because we want portfolio risks to reflect our research rather than the size of the largest stocks. 

Resource efficiency can mean different things to different investors. Some want to test it as a potential source of return while others want to reduce exposure to rising input costs and disruption. Others need to demonstrate measurable improvements in how their capital is invested. The underlying research can support all three, but the portfolio design and measures of success should differ. That is guiding our work on portfolio construction methods and wider market coverage. 

Antalya may influence the rules companies face over the coming years. Local decisions show how physical limits on land, power and water become costs in the present. We cannot forecast every permit or every dry season. We can ask better questions about which businesses need the most scarce resources, which can adapt, and how much risk we take when we invest in them. That is where the broad commitment becomes an investment decision. 

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Sources 

1. UNFCCC, COP31, Antalya, Türkiye, 9–20 November 2026. unfccc.int/cop31 

2. Ballotpedia, 6 November 2026, “Voters favored limiting data center development in 40 of 41 local ballot measures on Nov. 3.” 

3. Reuters, 5 November 2026, US market sell-off (Nasdaq Composite −5.5%; Philadelphia Semiconductor Index approximately −12%). 

Important Information 

This document is issued by Osmosis Investment Management UK Limited (“Osmosis UK”). Osmosis UK is an affiliate of Osmosis Investment Management US LLC (“Osmosis US”), Osmosis Investment Management NL B.V. (“Osmosis NL”) and Osmosis Investment Management AUS Pty Ltd (“Osmosis AUS”), and has been operating the Osmosis Model of Resource Efficiency. Osmosis UK is regulated by the FCA (Reference number: 765056). Osmosis US is regulated by the SEC. Osmosis NL is licensed as a manager of AIFs and authorised to provide discretionary portfolio management services and as such is subject to supervision by the Netherlands Authority for the Financial Markets under registration number 15006165. Osmosis UK, Osmosis US, and Osmosis AUS are wholly owned subsidiaries of Osmosis (Holdings) Limited (“OHL”). 

This research provided is for information purposes and does not constitute an offer or solicitation of an offer or any advice or recommendation to purchase any securities. No representations, express or implied, are made as to the accuracy or completeness of such statements, assumptions, estimates or projections or with respect to any other materials herein. 

Our research identifies and scores companies from the MSCI World or Emerging Market Index that report sufficiently on at least 1 of the following 3 metrics: carbon, water, and waste, to calculate a resource efficiency score for each reporting company – the Model of Resource Efficiency. Our Core strategies overweight efficient companies and underweight inefficient companies   within each Osmosis defined sector, to remain sector neutral to each benchmark. Companies without a score are neutralised to benchmark weight.   Our Active strategies invest only in efficient companies, outside of the Financial sector described below. Companies in the Financials sector are not given Resource Efficiency Scores. Certain strategies select Financials, based on complementary characteristics to the Resource Efficiency factor, for inclusion in the portfolio to maintain the portfolio’s overall factor weightings. All strategies exclude tobacco and companies that breach the UN Global Compact on social and governance safeguarding. 

The information contained in this document has been obtained by Osmosis from sources it believes to be reliable, but which have not been independently verified. Information contained in this document may comprise an internal analysis performed by Osmosis and be based on the subjective views of, and various assumptions made by, Osmosis at the date of this document. Osmosis does not warrant the relevance or correctness of the views expressed by it or its assumptions. Except in the case of fraudulent misrepresentation or as otherwise provided by applicable law, neither Osmosis nor any of its officers, employments or agents shall be liable to any person for any direct, indirect, or consequential loss arising from the use of this document. 

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