Water – Feature ESG


Asia is in the middle of a crisis. The region is home to two-thirds of the world’s citizens, yet they only have access to less than a third (28%) of the planet’s drinking water. This supply-demand imbalance is expected to widen and it is not exclusive to Asia. Indeed, the UN estimates that around 2 billion people globally do not have access to proper sanitation or clean drinking water. That is one in every four. By 2050, this is expected to be three in every four.


The issue is that although freshwater is replenished by rain and snow its supply does not grow. Yet the world’s population is. So is migration to urban centres, pollution, poor farming practices and droughts. These factors could lead to demand for freshwater being 40% greater than supply in the next nine years, the UN believes.


“We have to live each year with what nature provides us with, but you have population growth, industrialisation and more intensive farming,” says Andreas Fruschki, head of thematic equity and managing director at Allianz Global Investors. “Demand is growing, supply is not.” Another issue is that we do not drink most of the clean water we have access to. Agriculture consumes 71% of it, which is unsurprising given that it takes 1,000 tons of water to produce a ton of rice. Other large consumers include the paper, semi- conductor, industries.


fashion, manufacturing, energy and beverage


The widening supply-demand imbalance could lead to global instability with wars fought to control dwindling supply, rising global hunger and further health crises.


Issue 101 | March 2021 | portfolio institutional | 31


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