Greenhouse gas emissions and global warming dominate public discussion. But one of the sectors most affected by this phenomenon is somewhat lower on the radar of the discussion and the markets, despite its significant impact: water. 

The water crisis is advancing at a rapid pace. The World Health Organization (WHO) estimates that within four years, half of the world's population will live in areas of water stress. There is a segment of the capital market that seeks to contribute its drop of water to address this challenge by giving visibility to this sector with funds and ETFs focused on companies dedicated to the supply, treatment, technology, and management of water resources, or by developing indices that incorporate water risk for the most highly capitalized stocks, such as the TSC Water Security Index for the US and for Europe. (https://www.thomasschumanncapital.com/solutions). 

As has been the case with most ESG (environmental, social, and governance) funds and financial assets, the return on investments in water-related assets, such as those in the S&P Global Water Index, which includes 50 stocks from around the world, or Calvert Global Water, a fund that includes more than a hundred companies, have been in line with or slightly above the market average, with an annual return of 12.33% and 11.9% on average, respectively, for the last five years.

Source: S&D Dow Jones Indices