Even though water covers most of the earth’s surface, potable water is harder to come by, and it’s becoming more scarce as climate change warms the planet.
We need this liquid gold for drinking, sanitation, and watering crops and livestock, but the infrastructure to make this happen is aging in developed nations. In other places, it’s lacking altogether, and the United Nations says intense water scarcity could displace around 700 million people by 2030.
“Scarcity is a predominant theme in the water space, as demand is expected to exceed supply by (around) 40% by 2030, and in fact, only 1% of water on the globe’s surface is usable for human consumption,” says Jean-Hugues de Lamaze, managing director and senior portfolio manager at Ecofin.
Deiya Pernas, co-founder of Pernas Research, says the convergence of pollution and unpredictable weather patterns driven by global warming make access to clean and usable water more difficult, even as water demand continues to increase from industry, agriculture and a growing population.
Combined with aging infrastructure, there is “immense potential for companies involved in addressing these pressing water-related issues,” Pernas says. “Their solutions have a substantial runway for growth, which can translate into higher returns on capital for investors who choose to allocate their funds to this sector.”
