Robeco has published an in-depth assessment of the water market “Boiling Point: global growth, climate change and the increasing pressure for water resources”, to celebrate the 20th anniversary of the RobecoSAM Sustainable Water Strategy.
The third of its kind after 2010 and 2015 editions, the study demonstrates that water stress has worsened over the past 20 years as a result of population growth, increasing water consumption, pollution and climate change.
Projections for the coming decades paint a grim picture. More than half of the world’s population could experience water scarcity at least one month per year by 2050. Droughts and Floods have increased by 50% and 35% respectively over the last decade and show no sign of slowing down. Water degradation as a result of poor wastewater management (80% of all municipal wastewater globally is excreted into the environment untreated and eventually re-enters the water-cycle) among other factors, is adding to water scarcity and is threatening biodiversity.
While the challenges are clearly substantial, so too are the investment opportunities in companies along the entire water value chain for generating financial returns and positive impact. Companies that recognize the need and provide sustainable solutions suitable to the diverse segments of the global water market will be ideally positioned to ride the growing wave of interest and investment.
Robeco’s water study reveals where large-scale investments are needed in both emerging and developed markets in order to improve efficient water use, increase water supplies, ensure water quality, and mitigate scarcity in agriculture, energy and industry as well as within urban municipalities and rural communities. The case for water-themed investments has never been stronger.
The RobecoSAM Sustainable Water Strategy, which went live late September 2001, is one of the world’s first sustainable water strategies. It has been managed by the same Portfolio Manager – Dieter Küffer – since inception, and surpassed EUR 3 billion AuM for the first time in August 2021.
For two decades, the strategy has focused on companies that seek solutions to address the challenges of rising water demand. The strategy invests worldwide in companies providing technology, products and services relating to the water value chain, such as water distribution, management, efficient use, treatment, and analysis as well as irrigation systems.
Dieter Küffer, Senior Portfolio Manager for the RobecoSAM Sustainable Water strategy: “The world and the investment universe along the water value chain looked different 20 years ago, when I started managing the strategy. Policy makers and innovative firms have joined us since then in our aspiration to preserve clean water on our planet. I’m proud that the teams involved with the strategy, consisting of equity analysts, SI Researchers, or Active Ownership specialists, have enabled our clients to achieve their financial and sustainability goals. But the challenges for clean water provision are still at play – we cannot rest on our laurels.”
Mark van der Kroft, CIO Fundamental and Quant Equity, Robeco: “Our Trends and Sustainable Theme offering is competitive due to many reasons – the RobecoSAM Sustainable Water strategy is certainly one of them. Thanks to its strong track record and experienced investment team, the RobecoSAM Sustainable Water strategy continues to be the sustainable water strategy of choice. Robeco is a pioneer in the water sector, evidenced by having launched one of the very first water funds globally. Many others have followed, but our track record, expertise and understanding of the issue remain unrivalled, as made evident in the third edition of our water study, in which we underline the important role investors can play to help preserve one of our planet’s most precious resources: water.”