Friday, March 22 is World Water Day. Investors should keep it in mind, argued Impax Asset Management. Water infrastructure is in desperate need for investment around the globe, wrote Justin Winter, portfolio manager and director at Impax Asset Management in London in a recent note.
This year’s theme for World Water Day is “leaving no one behind,” Winter wrote.
That means investors interested in sustainability might want to review infrastructure needs in China, India and Sub-Sahara, where fast-growing cities need dependable water supplies. But it also means impoverished regions of wealthy regions like Europe and the United States also need improvements.
“The ongoing Flint water crisis, revealed in 2014 when the drinking water source for the city of Flint, Michigan, was found to be contaminated with lead, illustrates how water infrastructure investment is every bit as important in the developed world as it is in the developing world,” Winter argued. “No one should take access to clean water for granted.”
Climate change and new technologies represent two other opportunities for investors, Winter suggested. The former calls for new measures in conserving water like those pursued in Cape Town when that South African city’s reservoir almost went completely dry, a first for a major city.
New water tech to deal with water shortages, meanwhile, is a burgeoning field where chances for big returns await.
“Risk characteristics are comparable to equity markets and run through the global economy, across markets, sectors and regions. Water also provides attractive opportunities through the economic cycle, encompassing both defensive and cyclical businesses,” wrote Winter.
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