Fidelity Investments has figured this out, and the fund firm has launched a strategy called "thinking big" that explicates the need for water investments, among other world-changing ideas.
"Because global water consumption is expected to increase by 40% over the next 20 years, water shortages may get more acute and widespread, spurring more reliance on desalination technologies, water reuse and conservation," says Fidelity on its microsite, "The World's Water." "The results could have massive economic, ecological and geopolitical consequences, creating investing opportunities in places you may never have considered."
The point is to give investors and professionals ideas about where to invest in the future and for the future.
Bennett Freeman, senior vice president of sustainability research and policy at Calvert Investments, says his firm makes this easier by offering the Global Water Fund. The fund holds 30% of its assets in water utilities, 40% in infrastructure companies and 30% in water technologies, according to its report. Some 65% to 70% of the fund's positions (averaging about 100 stocks) are "pure plays," meaning the companies derive more than 50% of their revenue from water-related activities. The fund largely invests in small- and mid-cap stocks, since large-cap exposure spills outside pure plays.
"We began to realize a half dozen years ago that there was a freshwater crisis around the world," Freeman says. "We started looking at the whole range of water infrastructure and technology issues even in the most advanced OECD [Organisation for Economic Co-operation and Development] countries. And there is an extreme congregation of environmental challenges and investment opportunities."
Via its Global Water Fund investments, Calvert not only wants to address water issues but also bring them to light. The firm, Freeman says, regularly engages in shareholder resolutions to effect further positive change and "make a commitment to advocacy with companies and their water-risk disclosures."
To be sure, there are other funds and vehicles that invest in a similar manner. But it will take far more funds and dollars. With the right amount of investment attention, capital flows can make the water flow blue again.