Companies which fail to tackle water usage now ‘to be crippled’ in future as costs skyrocket

Amanda O’Toole, portfolio manager on AXA Framlington Global Thematics fund, discusses the changing landscape for clean technologies on World Water Day:

“Today around four billion people live without a reliable water supply for at least one month of the year. When coupled with the fact that the global population is currently growing by 200,000 people every day it’s clear that, without action, the number of people facing water scarcity will increase in the decades to come. The human cost and the implications for society would be severe.

“Global GDP growth means that on average, the population is becoming wealthier and standards of living are rising. The associated transition in some areas from a cereal based diet to greater protein consumption; the proliferation of consumer goods and continued urbanisation all exacerbate the issue of water scarcity by increasing per capita water consumption..

“Structural growth in demand for a scarce resource such as water should drive up its price, motivating investment to increase the efficiency with which we consume water in all areas of the economy. In addition to this simple economic signal, regulation is forcing improved water management in some areas and consumer expectations are creating demand for brands to implement solutions. Those companies whose goods and services support this shift toward better water stewardship benefit from long-term secular growth in demand.

“There are numerous technologies available which support this drive to protect water resources, reduce water consumption and increase its re-use. We see an increasing focus on this issue from corporates across multiple industries and geographies. Innovative solutions are emerging, for example – harnessing sensor technology in industrial applications, big data in agriculture and enzyme use in detergents.  This creates numerous investment opportunities as companies respond to the need for change and offer more sustainable technologies to their customers.”