The Dead Sea in Jordan is dying. The Aral Sea, once the fourth largest lake in the world, has been shrinking in size. Water shortage issues have been hitting the headlines in the United States, India, Turkey, and Taiwan. Water is vital to life. We need two to three liters of water a day. Yet, one in nine people in the world does not have access to clean water¹. The water crisis has also led to a severe economic problem - every year, the utility industry suffers a US$9.6 billion² loss due to water leakage.

Urgent need to change old water usage patterns

Why is there a growing imbalance in water resources? The underlying reason has to do with our economic model – 70% of drinkable water is used in agriculture³. For each hamburger we consume, 1,700 liters of water is required⁴. While rainfall is "free", tap water comes with a cost. Both urban and rural areas are in need of well-developed water supply systems that would involve significant investments. With a population boom, rising living standards, industrialization in emerging markets and increased demand for agricultural irrigation, the water source that has been nourishing our planet has become polluted, scarce, and even toxic.

As a result, investments have been initiated to improve water resources. In mature markets such as Europe and the US, drinking water and sewage infrastructure show signs of wear and tear. Upgrading the infrastructure and enhancing regulatory standards have become among the top priorities. In emerging markets, there is a need to develop new infrastructure and upgrade water sanitation facilities.

Sustainable Water resources is a ‘Mega Trend’

With the advent of technology, we can become more efficient, savvy, and environmentally friendly when it comes to using water.

In recent years, many corporates have set their target to develop sustainable water sources by incorporating advanced technology to irrigate crops, recycling and treating sewage, storing water in drought-prone areas, enhancing filtration solutions, and developing eco-friendly water systems. These measures will not only save the economy huge monetary resources but are also expected to bring about positive impacts to billions of people living on the planet.

As an individual, other than doing our part to reduce use of water, we can make a positive difference by influencing businesses with our investments. Investment in global water resources can focus on companies that are working to improve the supply and quality of water and resource efficiency. As such, we can foster the sustainable development of the world's water resources, laying a solid ground for three major opportunities.

3 Major Water-Related Investment Opportunities

First, we link investments to our values. The Global Water Strategy is aligned with the United Nations’ Sustainable Development Goals (SDGs) and related objectives. Such a framework provides investors the opportunity to participate in addressing environmental and social issues. Next, adopting a proactive and flexible approach to investing in quality water-related companies in a portfolio that is not restricted by sector and geography. This helps better capture the latest developments and relevant opportunities in the sector. Third, environmental, social and governance (ESG) considerations can be embedded into the decision-making process to help mitigate risk.

Water is precious. Let's work together for a cleaner, better future.

Source: 1. Water.org, April 2021. 2. "Water 20/20: Bringing Smart Water Networks Into Focus" Sensus, 2017. 3. "Managing water sustainably is key to the future of food and agriculture”, OECD, 2017. 4. Ecolab, the Closing Keynote Presentation from the Financial Times Water Summit pf Doug Baker, CEO of Ecolab. Emerald Edible, Water, Waste & Energy. US gallons are converted to liters, rounded to the nearest 10 liters, May 2019.