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