Water Stress: A World Wide Problem

Sustainable investors should be particularly concerned about how their portfolio holdings are addressing one of the most critical issues of our time:  Water.
 

Unsustainable water use is threatening agriculture, other business and populations in China, India and the US, according to a study by risk analysis company Maplecroft.  Companies who fail to manage this issue stand to lose sales, and even the right to operate in certain countries.


The Maplecroft Water Stress Index calculates the water stress of over 168 countries by evaluating renewable supplies of water from precipitation, streams and rivers against domestic, industrial and agricultural use.
The Middle East and North Africa are the most at-risk regions in the index. But widespread use of irrigation for agriculture, combined with increasing domestic and industrial water demand, means that in India (ranked 34^th), China (50) and the US (61), water resources are coming under increasing pressure, as well.

The most populous Chinese and Indian provinces are under the severe pressure, but many US states are also considered "high" or "extreme" risk, including several in the midwestern "breadbasket" of the country.

While better agricultural policies are needed, we know that corporations also draw heavily on water resources. They have a critical part to play in improving the water balance. Maplecroft recently ranked GE, Alcoa, Johnson Controls, Ford and Intel as the leaders in innovation of clean-tech solutions. 

Boardwalk's own research has found a high level of "water awareness" among the world's largest mining companies, including Australia's BHP Billiton and Brazil's Vale do Rio Doce, and beverage companies, Coca Cola, Pepsico and Diageo. Water stewardship is one of the 100+ factors considered as we rank companies for overall "sustainability". 

Pepsico, Vale and BHP Billiton are constituents of the Global ESG Titans model portfolio.