Responsible Investing (RI) incorporates environmental, social and governance (ESG) factors into your investment portfolio. These portfolios include stocks and bonds with brands that value sustainability, human rights, good working conditions, employee diversity and resource conservation. These brands are constantly vetted by fund managers, who are active shareholders and represent your interests inside the company, giving you a voice. There’s no need to compromise your expectations of return as an ethical investor. Every brand is selected not only for its alignment with investor values, but also for its historically better-than-average performance at market.
In this piece we’re going to touch on water as an essential component of your RI strategy, and how your capital can make a difference in what is arguably the world’s most essential commodity. Without access to potable water, populations suffer, agriculture fails and industries grind to a halt as entire regions are destabilized. Fortunately, innovators are ahead of the curve in purification, conservation and distribution of global water needs.
Why invest in water?
While water is abundant and infinitely recyclable (it never leaves the planet), distribution of clean drinking water cannot meet the needs of an increasing population with existing infrastructure. Just because water is nearby doesn’t mean you can access it — or drink it — without treatment.
Experts anticipate that with an infrastructure and technology investment of $7.5 trillion dollars, we will be able to meet the world’s water needs by 2030 and beyond. That’s everything from conservation technology like drip irrigation and software to monitor municipal and industrial consumption, to techniques like desalination. Egypt meets the water needs of its 100 million citizens almost exclusively by desalination of ocean water, and the byproduct is table salt and a number of nutrients and industrial minerals.
It’s easy to see how such a model can and will scale to include most, if not all, emerging markets with access to the sea. These large-scale contracts are awarded to key engineering firms, and investment in those brands ensures not only life-saving systemic change but has traditionally led to competitive returns.
This global infrastructure build-out impacts the other pillars in our RI strategy: waste management, energy and food and agriculture. Water must move, and that requires energy. Aging hydro infrastructure is being refreshed for both conservation and sustainability, and when combined with wind and solar ensures water is purified and pressurized to get where it’s needed.
Water is tightly intertwined with waste management. Water is required in the recycling process, and the more waste we capture for recycling, the cleaner the earth’s watersheds will be. Finally, water is integral for the agricultural expansion needed to feed a rising population for the next six decades — before it recedes to current levels by the end of this century.
Coordinating all of this takes a tremendous amount of technology. Infrastructure has as much to do with microchip engineering and software as with pipelines. Ensuring conservation and efficiencies at both the consumer and the system level result in trillions of litres being available that would otherwise be inaccessible.
Get expert advice on water as a component of Responsible Investing
Water is a key driver of efficiency and innovation worldwide, from waste recycling to agriculture. There are many jumping-off points for exploration and discussion and the winwin EarthLink™ GIC is a great place to start. Discover the market potential that’s a natural fit for your investments and your values.
To explore how Responsible Investing can be a component of your financial strategy, connect with one of our accredited, trusted advisors.