Gustavo Bernal Torres
Water Funds Dilute The Environmental Message
There may be an investment case for holding them, but it’s not obvious they are saving the planet.
The investors who penned the open letter — including BNP Paribas Asset Management, Eden Tree Investment Management and Quilter Cheviot — said they were taking action by engaging companies to use water sustainably. They also said they saw reducing their exposure to water risk as a “core fiduciary duty” and that they were looking to benefit from the “opportunities associated with the transition to a water secure economy”.
Impax’s water strategy, divides water opportunities into four: utilities, distribution and infrastructure, treatment and efficiency. French-listed Veolia is an example of a water utility company, which brings some earnings stability. Sabesp, a Brazilian sanitation company that provides water and sewage services, is another holding. Other holdings are less obvious. Cintas, a uniform rental business, is a holding at Impax because it washes clothes efficiently, at scale, reducing water and energy usage — unlike home washing which can be energy inefficient.
Source: https://www.ft.com/content/d8de8924-9eaa-4bb0-9c42-c91208d80b77