{"id":34452,"date":"2022-02-25T00:36:47","date_gmt":"2022-02-25T05:36:47","guid":{"rendered":"https:\/\/test.greenmoney.com\/2025\/?p=34452"},"modified":"2024-04-01T13:06:30","modified_gmt":"2024-04-01T17:06:30","slug":"navigating-the-canals-of-water-investing","status":"publish","type":"post","link":"https:\/\/test.greenmoney.com\/2025\/navigating-the-canals-of-water-investing\/","title":{"rendered":"Navigating the Canals of Water Investing"},"content":{"rendered":"
>> Back to March 2022 Issue<\/a><\/div>\n

\"Garvin<\/p>\n

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From March 2022 Archive<\/i> \u2013 <\/span>Water is elemental. Crucial for life as we know it. Finite in supply\u2014particularly fresh water\u2014it is chronically degraded by pesticides, herbicides, fossil fuels operations, discarded plastics, and countless other contaminants. Add it all up and it seems like the perfect combination of inelastic demand and diminishing supply. In fact, 2.2 billion people<\/a> around the world do not have safely-managed drinking water services and 4.2 billion people don\u2019t have safely-managed sanitation services. In the U.S. alone, fully one in six gallons<\/a> of the fresh water we produce is wasted through old, leaky, deteriorating infrastructure, equaling 6 billion gallons of treated water wasted every single day before it has a chance to be consumed or otherwise put to productive use.<\/div>\n<\/div>\n<\/div>\n<\/blockquote>\n

The easy math: we need more, and better access to, safe fresh water. It seems very straightforward to invest in freshwater solutions and enjoy the returns. But, invest in what<\/em>, exactly?<\/p>\n

Time to Do Your Homework<\/h2>\n

Key to deciding what to invest in is discerning what not<\/em> to invest in, or, at least, what is more or less likely to give us the market exposures we had in mind. So, tonight\u2019s homework assignment: scour the list of water-themed ETFs available on any given brokerage platform. Look at the underlying holdings. You will find companies that produce water infrastructure…but almost none of it is for recycled or recyclable water projects. You will see companies in water ETFs\u2019 10 Largest Holdings lists that have little water exposure at all, such as a firm that garners only six percent of its revenues from water testing and 94 percent from entirely different industries and activities. Keep looking, and you will find water utilities with no sustainability, stewardship, or other related efforts behind their sale of water. They are in charge of the earth\u2019s most precious resource while failing to demonstrate good stewardship of it. In fact, many water-themed ETFs hold utilities that derive a material portion of their revenue from selling water to fracking companies.<\/p>\n

As is so often the case in ESG investing, it pays to do your homework, and to know that your fund manager is doing theirs, too.<\/p>\n

The Value of Water<\/em><\/a>: A Growing, Global Risk<\/em> by The World Economic Forum (WEF) highlighted the critical need for investors to take action on the water shortage. This striking report outlines a comprehensive list of risks and opportunities related to freshwater scarcity across all industries globally. In fact, according to WEF\u2019s analysis, water scarcity will not just slow economic growth and exacerbate social inequalities, but is one of the greatest risks to global stability. Activities like selling water for use in fracking fluid will not decrease our economy\u2019s freshwater risks.<\/em><\/p>\n