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The Importance of Investing in Water

Water is one of the most important substances on earth: the one substance that connects everything to everything else. If there were no water, there would be no life.
The Importance of Investing in Water | Transformation Holdings

It is hard to think about the importance of investing in water.  It is often taken for granted in Western countries because of how “everywhere” it is. Water exists:

  • As vapor in the air
  • In our rivers, lakes, streams, creeks
  • As icecaps and glaciers
  • In moist soil and aquifers

In the top developed countries like the U.S., we turn on a faucet and there it is. We flush the toilet, run water in the sink to brush our teeth or wash dishes, take half hour showers… it is easy to think we’ll never run out.

Water is one of the most important substances on earth. In fact, it is the one substance that connects everything to everything else. We start life in amniotic fluid consisting of 99% water, and everything – plants, animals, and humans – must have it to survive. If there were no water, there would be no life.

That is something to think about…

Water: Less Abundant Than It Seems

When you look at a globe, it looks like there is plenty of water to go around. After all, about 71% of the Earth is covered in it. However, the amount available for our use is less than 1%.


Because the oceans, made of saltwater, count for over 95.5% of the world’s water sources, but the freshwater sources (for example, rain that falls and moves into streams, lakes, and groundwater) are what provide us with the every day water we need to live. Yes, the water cycle is continuously returning water to the ground, but not necessarily in the same quality or quantity.

Of course, if our population stayed constant, none of this would be an issue. However, let us look at some quick population stats:

  • The 7th billion baby in the world was born in 2007.
  • The UN predicts that we’ll have about 8.5 billion people alive on the Earth by 2030.
  • The EPA reports that the average American family – just America! – uses more than 300 gallons of water per day at home.

With such a vast increase in our global population the demand for water is at an all-time peak. -And, while the population and demand for freshwater resources continues to grow, our actual supply of potable water remains the same.

Water Efficiency is Important

Plainly put, there is an excessive and wasteful use of water, and the water that is being returned into the ecosystem is less potable than it was when it left. Case in point, the United Nations Water agency (UN Water) estimates that more than 80% of the wastewater generated by society flows back into the ecosystem without being treated or reused. 

As well, we are facing more droughts than ever before. Regions such as the U.S. Southwest are at particular risk. At the height of the 2012 drought, the U.S. Department of Agriculture declared a natural disaster in over 2,245 countries, and in 71 percent of the United States. Globally, the drought struck several major breadbasket regions in 2012, adding to food price instability. 

Droughts affect livestock and crops. They have an impact on our energy supply, as well, affecting the reliability of energy production from plants that use cooling water to maintain safe operations. Hydroelectric power may also become unavailable during droughts.

Saving water ultimately also saves energy. The treating, transporting, and heating of water all take some form of either electricity or gas power, and those costs translate into rising rates on utility bills. Re-thinking the way we use water could account for significant savings on more than just our water bills.

14 Water Efficiency Best Management Practices

The Federal Energy Management Program (FEMP) worked with the U.S. Environmental Protection Agency (EPA) to develop 14 water efficiency best management practices to help increase water efficiency. While these best practices are pointed towards agencies, they can be used in any business, organization and facility.

A few are listed below with brief explanations, but you can find the full list with in-depth descriptions on the website.

  • Water Management Planning
    Create a strategic water efficiency plan that covers how you currently use water, and how to combat water waste moving forward.
  • Information and Education Programs
    When your company or organization is taking initiatives for water conservation and efficiency, share it with your community and news outlets. If possible, allow your community to participate in your water initiatives.
  • Distribution System Audits, Leak Detection, and Repair
    Regularly review your water systems for leaks, pipe corrosion, damaged joints and more to reduce water waste.
  • Water-Efficient Landscaping
    Rather than build grounds that require a lot of care and watering, there has been a shift towards using plants and the natural landscape to beautify. Rain gardens are an example of this growing trend to help reduce wastewater and water waste.
  • Water-Efficient Irrigation
    Beyond rain gardens, water-efficient irrigation includes, among other things, watering according to the season rather than the same watering schedule year-round.

Ways to Invest in Water

In her article, 3 Ways to Invest in Water, Victoria Brodsky describes just a few ways:

#1: Water ETF’s

Water ETF’s are exchange traded funds that focus on investments in the areas of water treatment, water sales, and water distribution. This includes manufacturers of water related products, water purification companies, and municipal-level water treatment organizations.

#2: Look at the Holdings of Water Indexes

An alternative way to track water investments is to review the holdings of water indexes whose purposes is to track different types of water related investments such as the Dow Jones Water Index, The S&P 1500 Water Utilities Index and the ISE-B&S Water Index.

#3: Private Equity or Venture Capital Investments in Water

If you are interested in a riskier water-related investment you can look at private investment opportunities through companies focused on water treatment, purification, and sustainable solutions.

In addition, you can simply buy shares of companies that create water infrastructures.

Why Should You Be Thinking About Impact Investing, and Investing in Water?

We have a growing need for clean water. We can point to the fact that 748 million people still do not have access to an improved drinking water source. Existing indicators do not address the safety and reliability of water supplies.

We can point to the wasteful use of water in fully developed countries, and the lack of care shown in cleaning the wastewater we produce. We can show how -not just our oceans, but our rivers, lakes, and streams are being polluted, reducing the less-than-1% of drinking water to even smaller amounts.

But impact investing is not about taking care of the now. It is not about today. It’s about five years from now, and the need to build technology that allows for the desalination of ocean water to make it potable. It is about ten years from now, when there are 8.5 billion people in the world, and the choices we make today mean the difference between starvation from poor irrigation systems or abundance from proper water efficiency.

The importance of investing in water today is to ensure there is enough water to survive and enjoy tomorrow’s opportunities.

We still have a long way ahead of us on the journey towards sustainability, and we’d like you to join us. Transformation LLC combines strategic advisory and project development to help family offices, sovereign funds, and private companies capture extraordinary opportunities at the inefficient frontiers of agriculture, energy, and water, integrating the latest technologies to achieve lasting profits while maximizing efficiency and impact and transforming the world.

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