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News + Insights

World Water Day: Investing in a Critical Resource

“When you need water, water is the only thing that will do.”
~Matt Diserio, President, Water Asset Management

Climate change is increasingly disrupting the hydrological cycle, manifesting in increased flooding and droughts.  Alongside this, multiple other human activities are leading to water shortages, the spreading of disease, and pollution.

While we all know that water is critical to life, we don’t always act in a way that aligns with its value.  The poor and those living in rural areas are generally most affected, but urban residents are also at risk.  A UN progress report recently noted that “even before COVID-19 struck, the world was off track to meet Sustainable Development Goal 6 (SDG 6) – the goal of ensuring water and sanitation for all by 2030.”1 

Water is a key investment theme for Gitterman Asset Management: our SMART Climate UMA includes an allocation to Water Asset Management’s Global Water Equities strategy and our mutual fund models include the Virtus AllianzGI Water Fund.

As global financial markets embrace ESG and climate change risks and opportunities, water’s role in company value chains is becoming more transparent.  This is leading to a greater focus on water conservation and treatment, and an awareness of the need for infrastructure improvements. Innovations in the water space include “smart meters” to manage water use, advanced treatment technologies, and redesigning consumer packaging to reduce water requirements in manufacturing processes.

From an investor perspective, water is an opportunity for positive impact, both  directly with regard to water systems, and also in relation to improvements in energy efficiency related to water services.  Water has also “historically acted as an effective hedge against inflation” and demonstrates “relatively low levels of risk and volatility.”2

For more information, check out this interview with Matt Diserio on TheIMPACT TV and then connect with us for a deeper dive on how our SMART Climate UMA incorporates the water theme.