The business of water: no one-size-fits-all approach
By Isla Binnie
NEW YORK, March 22 (Reuters) -The United Nations wants to get people talking in New York this week about investing in safe water, sanitation and hygiene, which it describes as "the most basic human need for health and wellbeing".
Puzzles remains over how best to count the financial, social and environmental costs and benefits of water, but many investors now state an aim to generate returns while also improving water access and quality.
Here are some examples of the business of water.
SELLING NEW PRODUCTS
Non-profit group CDP says firms have identified ways to use less water or respond to an increasingly resource-conscious market. These range from more efficient cooling systems for power generation to selling new products such as rinse-free soap in a market CDP calculates could be worth a combined $436 billion.
BUYING STOCK
Shares in large groups that provide water-related services are listed on national stock exchanges, including household names such as Britain's 7-billion-pound ($8.6 billion) Severn Trent SVT.L and American Water Works AWK.N, which operates across 14 U.S. states and is valued at around $27 billion.
PUBLIC-PRIVATE PARTNERSHIPS
A group of experts established by the Dutch government is proposing "Just Water Partnerships" in which development finance institutions would invest alongside private firms to improve water systems in lower-income countries.
The World Bank and some national governments have already launched public-private structures aimed at reducing the planet-warming impact of greenhouse gas emissions, with partners including lender Citi and asset manager BlackRock.
FUNDS
There are about 80 funds globally which specialise in investing in the theme of water, according to data provider Morningstar.
One of those, the Calvert Global Water Fund, tracks the performance of an index of companies that "are offering products or services that are part of a solution to global water challenges," said portfolio manager Jade Huang.
These range from Italian pump maker Interpump ITPG.MI to United Utilities Group UU.L and firms in water-intensive sectors such Taiwan Semiconductor Manufacturing Co 2330.TW.
"There is no one-size-fits-all approach that can help to approach the many aspects of dealing with water challenges," Huang added.
New York-based Water Asset Management launched its first fund in the sector in 2006. It runs vehicles that invest in water quality and supply-related companies and assets, and has now launched platforms that allow collective investments by retail investors.
"Purpose and profit in the water industry have been bedfellows for 1,000 years," said Matthew Diserio, Water Asset Management's president.
PRIVATE EQUITY
Sciens Capital Management in New York started working on bringing together the tens of thousands of smaller utility businesses in the United States eight years ago, and closed its Water Opportunity Fund last summer with committed capital of $850 million.
"We would go around in a pickup truck and look at these broken water systems that service 100, 200 or 300 people, and we have aggregated that," partner Alex Loucopoulos said.
"I feel like we are just getting started here because of the magnitude of the problems that need to be fixed," he added.
DERIVATIVES
Traders can buy and sell futures contracts - agreements to buy in the future for prices agreed today - based on the price of water in California on the Nasdaq Veles California Water Index.
Lance Coogan, who developed that concept for water price indexing, describes it as "the volume-weighted average of the actual water transactions that are taking place".
"People were buying water in the western United States and not knowing what the guy down the road was doing, so we worked out the formula and put that price up on a screen," Coogan said.
"I was astonished that you can get derivatives on every commodity in town: wheat, pork bellies, whatever you want, but no water. How can you have those things without having the water price?" he added. "A more efficient market means cheaper water and cheaper food."
WATER RIGHTS
In Australia, rights to share water resources or receive irrigation for crops can be bought and sold. A 2021 government-led inquiry called for reform of the markets' governance, although it said water trading had allowed irrigators to increase access to water and earn income from selling rights.
HUMAN RIGHTS AND RISKS
A U.N. Special Rapporteur on water questioned in 2021 whether it was right to use market tools like pricing based on supply and demand on water, saying it should be managed as a public good fundamental for life, rather than as a commodity that can be traded.
Pedro Arrojo Agudo argued specifically against water being managed in futures markets, suggesting this could lead to price volatility and speculative bubbles. He also called for stronger regulation around managing concessions and said private investment in water infrastructure was reducing the quality of service.
($1 = 0.8173 pounds)
Reporting by Isla Binnie; Editing by Lincoln Feast.
متعلقہ اثاثے
تازہ ترين خبريں
دستبرداری: XM Group کے ادارے ہماری آن لائن تجارت کی سہولت تک صرف عملدرآمد کی خدمت اور رسائی مہیا کرتے ہیں، کسی شخص کو ویب سائٹ پر یا اس کے ذریعے دستیاب کانٹینٹ کو دیکھنے اور/یا استعمال کرنے کی اجازت دیتا ہے، اس پر تبدیل یا توسیع کا ارادہ نہیں ہے ، اور نہ ہی یہ تبدیل ہوتا ہے یا اس پر وسعت کریں۔ اس طرح کی رسائی اور استعمال ہمیشہ مشروط ہوتا ہے: (i) شرائط و ضوابط؛ (ii) خطرہ انتباہات؛ اور (iii) مکمل دستبرداری۔ لہذا اس طرح کے مواد کو عام معلومات سے زیادہ کے طور پر فراہم کیا جاتا ہے۔ خاص طور پر، براہ کرم آگاہ رہیں کہ ہماری آن لائن تجارت کی سہولت کے مندرجات نہ تو کوئی درخواست ہے، اور نہ ہی فنانشل مارکیٹ میں کوئی لین دین داخل کرنے کی پیش کش ہے۔ کسی بھی فنانشل مارکیٹ میں تجارت میں آپ کے سرمائے کے لئے ایک خاص سطح کا خطرہ ہوتا ہے۔
ہماری آن لائن تجارتی سہولت پر شائع ہونے والے تمام مٹیریل کا مقصد صرف تعلیمی/معلوماتی مقاصد کے لئے ہے، اور اس میں شامل نہیں ہے — اور نہ ہی اسے فنانشل، سرمایہ کاری ٹیکس یا تجارتی مشورے اور سفارشات؛ یا ہماری تجارتی قیمتوں کا ریکارڈ؛ یا کسی بھی فنانشل انسٹرومنٹ میں لین دین کی پیشکش؛ یا اسکے لئے مانگ؛ یا غیر متنازعہ مالی تشہیرات پر مشتمل سمجھا جانا چاہئے۔
کوئی تھرڈ پارٹی کانٹینٹ، نیز XM کے ذریعہ تیار کردہ کانٹینٹ، جیسے: راۓ، خبریں، تحقیق، تجزیہ، قیمتیں اور دیگر معلومات یا اس ویب سائٹ پر مشتمل تھرڈ پارٹی کے سائٹس کے لنکس کو "جیسے ہے" کی بنیاد پر فراہم کیا جاتا ہے، عام مارکیٹ کی تفسیر کے طور پر، اور سرمایہ کاری کے مشورے کو تشکیل نہ دیں۔ اس حد تک کہ کسی بھی کانٹینٹ کو سرمایہ کاری کی تحقیقات کے طور پر سمجھا جاتا ہے، آپ کو نوٹ کرنا اور قبول کرنا ہوگا کہ یہ کانٹینٹ سرمایہ کاری کی تحقیق کی آزادی کو فروغ دینے کے لئے ڈیزائن کردہ قانونی تقاضوں کے مطابق نہیں ہے اور تیار نہیں کیا گیا ہے، اسی طرح، اس پر غور کیا جائے گا بطور متعلقہ قوانین اور ضوابط کے تحت مارکیٹنگ مواصلات۔ براہ کرم یقینی بنائیں کہ آپ غیر آزاد سرمایہ کاری سے متعلق ہماری اطلاع کو پڑھ اور سمجھ چکے ہیں۔ مذکورہ بالا معلومات کے بارے میں تحقیق اور رسک وارننگ ، جس تک رسائی یہاں حاصل کی جا سکتی ہے۔
