Water scarcity poses a growing threat to both people and companies around the world. According to the United Nations, by 2030 the world will face a 40% water deficit. And by 2050, the global population is expected to rise to 9.1 billion from the current 7.5 billion, sharply increasing demand for freshwater resources. Savvy companies are investing in new technologies and better practices in order to flourish in our water-strapped future.
Wasting Water: Bad for People, A Threat to Companies
In addition to straining community resources, water scarcity poses a huge challenge to businesses in industries from agriculture to textile manufacturing. “Water shortage and pollution pose a physical risk to companies, affecting operations and supply chains,” according to Scientific American.
But environmentally conscious investors are taking this chance to fund water conservation companies and technologies, helping the planet while growing their portfolio balances over time.
Firms working to ease water scarcity range from innovative startups developing new technologies to major corporations building waste treatment facilities that recycle water for use in agriculture and industry.
Better Water Management
As agriculture currently uses 70% of the world’s freshwater resources, companies are scrambling to find ways to conserve water through new irrigation techniques and by using recycled industrial water for crops. For example, Xylem is an NYSE-listed firm that offers a variety of technologies to conserve water on both small and large land holdings.
Recent changes in SEC regulations allow individuals to invest in securities-backed crowdfunding transactions. Lucid Energy, which was funded using crowdfunding platform OurCrowd, has developed tiny turbines that produce electricity from the movement of water through municipal water system pipes.
Israel has long pioneered efficient water technologies, including drip irrigation, that have allowed the country to maintain an adequate water supply despite massive population growth over an area that is 60% desert. Water-Gen is an Israeli company reimagining water sourcing. They produce affordable units that generate potable water from water vapor in the surrounding air. Units come in sizes ranging from personal all the way up to large-scale generators that can be used by communities.
Investors See Opportunities in Waste Water
Treating waste water is expected to become a growing industry as the world seeks new sources of water to use in factories. According to Water Online, Paris-based company Suez is a leading force in industrial water recycling. The company recently teamed up with a Canadian pension fund to buy General Electric’s US water treatment business, expanding their reach in the American market.
Manufacturing companies are also looking for solutions to water scarcity. Some 35 Swedish companies, such as fashion brand H&M and furniture retailer IKEA, came together to form the Sweden Textile Water Initiative (STWI) to improve water efficiency in global textile and leather manufacturing hubs, such as China, India, and Bangladesh. From improved water governance to increased investment in sustainable practices, STWI was able to save almost 2.5 million cubic meters of water and 39 million Swedish kronor (or 4.3 million US dollars) in 2015 alone.
As climate change and water scarcity continue to put increasing pressure on businesses and communities, investors can shift funds to companies whose practices will push for a more sustainable future.