Water: a pervasive resource and a portfolio staple - BNP Paribas Asset Management

The transition of many economies from a depletive to a sustainable model with better social and environmental outcomes creates a wide range of investment opportunities in many areas including water, a resource that is fundamental to not only life, but also across end-markets from the consumer to industrial businesses.

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... What are the main investment opportunities related to water?

BNP Paribas Asset Management have been investing in the transition to a more sustainable economy for more than 20 years. This has always included water, so they have built up considerable experience in this field. In water-related investing, they see three broad areas:

- Water infrastructure
- Water treatment
- Water utilities

Water infrastructure is particularly important at the moment: BNP Paribas Asset Management expect strong growth in this area in the next few years with numerous – and diversified – opportunities for investors.

In developed markets, there is ongoing demand for water infrastructure because in many countries water networks are dilapidated and need upgrading, if not replacing. This is important: millions of litres of water are lost due to leakage. In addition, outdated systems can present health risks.

In emerging markets, particularly in India and China, which are developing and becoming richer, there is a need for more water infrastructure. Millions of people are moving to the cities and this growing urbanisation means more demand for clean and healthy water, but also for wastewater treatment. Clearly, there are growth opportunities here although for now, our focus is on North America and Europe.

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