Water – Cover story
ically viable means of making H2O, so as populations grow the water shortages witnessed in California and South Africa in recent years will become more prevalent.
it on trips to the beach will understand why we don’t use it to make coffee.
Of the water that is fit for consumption, 70% is underground and 29% is frozen in the polar caps leaving just 1% for personal use. Of that 1%, around nine cups in every 10 are used by com- mercial enterprises, including farms. The biggest problem is that water is of finite supply, so huge population growth projections do not make good reading. One area where we could see increasing stress in the coming years is Asia. Around 60% of the global population lives there, but the continent only has 33% of the world’s freshwater, according to Citibank. At the time of writing, science has not worked out an econom-
Another problem is that of existing sources of drinking water being lost to pollution and leakage. The United Nations (UN) estimates that more than 80% of wastewater, including human waste, is sometimes discharged into rivers without being cleaned first. Burst pipes and leaking taps are also a concern. “Water is vital to the functioning of the global economy, but cli- mate change, pollution and increasing industrialisation is put- ting a lot of pressure on this finite resource,” warns Emily Chew, global head of ESG at Manulife Investment Management. “We don’t have enough water in the world for all the current rates of growth in global population and industrial activity, and then what we do have is being increasingly polluted,” Chew says.
A material issue Investing in companies that increase access to water or improve its quality is not just for people who are driven to make the world a better place. Water is a material issue for those invest- ing in mainstream businesses, too. Water stress is not just something that affects people in other parts of the world. A lack of clean water can hit economic growth globally.
Issue 90 | February 2020 | portfolio institutional | 25
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