A resource that should no more be taken for granted

Like for many other earth resources, water was not an issue, until it became one. As the global population burgeons and climate change intensifies, bringing extreme water incidents from floods to droughts, the fragile balance between water supply and demand is increasingly strained. With over 3  billion people living in areas of “high” or “extremely high” risk of water stress[1], and the quality of water sources degrading due to pollution, our food security and health are at risk. We must address the water gap, this imbalance between a decreasing sustainable water supply and increasing total water demand.

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Bastien Dublanc & David Czupryna
Senior Portfolio Managers, Thematic Equity strategies
As a global water crisis looms, there is an urgent need to reallocate capital towards water-resilient business models and solutions

Building a water-secure world: where to start ?

Agriculture and industries are altogether responsible for 90% of water withdrawals[2]. In order to address the exacerbating water crisis, the world must transition to more sustainable agricultural systems, and reduce industrial water use and wastewater generation. Solutions exist, both systemic and technological, to help bridge the water gap by optimizing water usage.

For agriculture, water-smart farming practices can be combined with smart technologies such as precision irrigation techniques. On the industrial side, the use of closed loop water processes, the intensification of recycling practices and wastewater treatment are steps in the right direction.

As individuals, we also have a role to play, by improving our water consumption patterns. A first step, easy to implement, can be the shift to more water-conscious diets.

Finally, preserving and restoring biodiversity can plan a pivotal role in increasing freshwater availability.

There are so many areas where we can make a difference! Want to know more? In our white paper, we explore the many facets of our relationship with, and management of, water, as well as potential solutions to improve their sustainability.

How to address the looming water crisis

Figures are worth a thousand words. 

2,800 km3

Annual Water Gap[3]

3.1 billion

People living in areas with high or extremely high risk of water stress[4]

72%

of global freshwater use is due to Agriculture[5]

8,000

Liters of water needed to produce a pair of jeans[6]

10%

of global water withdrawals are used for energy production and electricity generation[7]

Managing risks and uncovering investment opportunities

In many industries, water is already, or increasingly becoming, an operational risk, and as such it should be integrated into strategic planning and capital allocation. Besides, water is by essence a local issue, linked to the precise location of companies’ assets – their closeness to freshwater sources, the quality of these sources, the potential climate change impacts...  

A comprehensive analysis of companies’ - or issuers’ - strengths, weaknesses, risk and opportunities, cannot ignore the water factor.

Bastien Dublanc and David Czupryna, our thematic investment managers, highlight their approach in an interview, sharing their perspectives on the promising opportunities available to investors willing to explore this secular thematic.

Bastien Dublanc
Senior Portfolio Manager, Thematic Equity strategies
David Czupryna
Senior Portfolio Manager, Thematic Equity strategies
FUNDS

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[1] World Resources Institute (2023)
[2] The United Nations World Water Development Report (2023)
[3] Difference between sustainable water supply and total water demand, Source World Resources Institute, Acqueduct Database 2020
[4] World Resources Institute, 2023
[5] United Nations World Water Development Report 2023
[6] https://www.aquatechtrade.com/news/industrial-water/cleaner-denim-groups-look-to-tackle-water-use
[7] MDPI (2022), Wastewater as a Renewable Energy Source  

All our strategies involve risks, including the risk of loss of capital.

The most significant risks on this strategy are:

  • Risk of loss of capital
  • Equity risk
  • Foreign exchange risk
  • ESG Investment risk

For further details on risks associated with investing in the promoted strategy, a general description and explanation of the various risk factors is available in the section Risk Factors of the relevant regulatory documents.

Latest analyses

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    Investing in water: a no-brainer for the future

    Bastien Dublanc and David Czupryna, managers of Candriam's water investment strategy, explain why they invest in this theme, how they select their stocks, and what differentiates Candriam from other investment managers in this area.
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    Bastien Dublanc, Astrid Pierard, Jessica Carlier, ESG, SRI, Equities, Research Paper, Water

    PFAS: Genius gone wrong

    PFAS have been widely used for decades due to their unique properties in various domestic and industrial applications. They are resistant to water and virtually indestructible. They are also seen as the poison of the century. Where do we stand in terms of regulation? What are the PFAS-related risks? Where are the opportunities?
  • Research Paper, Bastien Dublanc, David Czupryna, Equities, Water

    Water: How to address the looming water crisis?

    Water sustains not only human existence but the entire ecosystem. As the global population burgeons and climate change intensifies, bringing extreme water incidents from floods to droughts, the fragile balance between water supply and demand is increasingly strained.

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