Water Investments can make a crucial contribution to a sustainable solution of global water scarcity.
Water plays an essential role in our everyday lives. Its sufficient availability is fundamental to the development of every nation’s economy. Proper water management is therefore a central pillar of sustainable development of our society but is at the same time one of our greatest challenges of the 21st century due to steady population growth, climate change and a general shortage of drinking water.
However, clean and usable water is scarce, globally unequally distributed and the waste of water is still enormous. Certainly, the awareness of water as a vital commodity and investment product has gradually increased with the unique characteristic of not being a product that is subject to the market economy’s everyday rules. In many countries the water market is publicly regulated and independent of the current economic situation.
Water is going to become the commodity of the future. Demand for water has risen steadily in recent decades. On the one hand, this is down to the enormous increase in population over the last century and on the other hand down to the steadily increasing prosperity of underdeveloped countries and with that the accompanying rising consumption around the world. More people need logically more water but also more food and even consumer goods, which in turn are produced with the help of water. Above all, people need clean and drinkable water. Therefore, the treatment of wastewater and toxic industrial waters, as it is especially the case in China, is increasingly becoming a key pillar of investments in the water industry.
The United Nations aims to bring the number of people without access to clean drinking water as well as access to proper sanitation to zero by 2025. Most likely, this goal will be missed significantly. However, in order to get closer to this endeavor in the long run, private investments in all areas of the water industry are not only necessary but inevitable. Since the public sector can not handle this on its own in any country, capital from outside via the stock exchange is necessary.
Thus, water is an investment topic that is perceived and treated differently than other investment stories on the stock market. Investments in the water industry should be less perceived as speculative and short-term investments. The reason for this is the mentioned United Nations’ goal of drastically reducing the number of people without access to clean drinking water and without access to sanitary facilities in the long term. However, this definitely requires companies that have the know-how and the technologies to implement these goals together with the UN and other organizations around the world but especially in Africa and underdeveloped countries. However, to lay the foundations, companies must be provided with capital through the stock exchange in order to be able to invest in research and development in the long term.
Water investments are finally characterized by the fact that they are oriented towards the long term. At the same time, they are offering many interesting and yield-oriented opportunities for not only professional investors but also for retail investors. Investments in water are an essential component of an ecological and sustainable investment.