Cover story – Water
LIQUID ASSET
With droughts, floods and bushfires becoming regular occurrences, how should investors prepare their portfolios to face growing water stress? Mark Dunne takes a look.
Single-use plastic has become the great pariah of our time. The chemicals it emits when discarded in towns, cities, the coun- tryside and the oceans, pollutes our planet and is a danger to wildlife.
It is such a big topic with consumers that former prime minis- ter Theresa May set a target to eradicate disposable packaging in the UK within 25 years. David Attenborough has made a documentary about it, while Prince Charles has given speeches on the dangers that the humble plastic bag poses to the envi- ronment. Even Greenpeace has a dedicated team to campaign on the issue. That’s fair enough. The chemicals used in making plastic harm the environment, but perhaps people should be equally, if not more, concerned by the water inside the plastic bottle . As bad as single-use plastic is for the environment, countries are unlikely to declare war on their neighbours over plastic bags floating in the sea. Yet they might if the source of water they share with other countries is diminishing and their people are thirsty. Indeed, wars where water has been a factor behind the hostilities have been fought and the term “water conflict” could enter the lexicon in the coming years as populations grow and lakes and rivers shrink. Water crisis has been named as the world’s leading global risk by the World Economic Forum, which has judged the issue a greater threat to humanity than food shortages or infectious diseases.
24 | portfolio institutional February 2020 | issue 90
Water stress has even been at the heart of a James Bond film. In 1965, the secret agent was trying to recover stolen nuclear bombs in Thunderball, but by 2008’s Quantum of Solace weap- ons of mass destruction had been replaced by a man trying to restrict access to water. A worrying sign of things to come.
Water, water everywhere… Not all water is the same. It covers three-quarters of our planet, but only 3% is freshwater, which is the stuff we drink, bathe in, clean our clothes with and spray on crops. This is found in gla- ciers, ponds, lakes, reservoirs, rivers, streams and wetlands as well as underground. The rest is saltwater that makes up the seas and oceans and those of us who have taken mouthfuls of
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