Insights
Investing in water – a fundamental human right

Water and climate change are inextricably linked. Climate change affects the world’s water in complex ways - from unpredictable rainfall patterns to shrinking ice sheets, rising sea levels, floods and droughts.

According to the United Nations about two billion people worldwide don’t have access to safe drinking water today, and roughly half of the world’s population is experiencing severe water scarcity for at least part of the year. And as Cyclone Gabrielle and the recent East Coast drought have proven – New Zealand is not immune.

So, what can we do to help? Think about it this way, it’s one thing to divert your investing away from the bad. But to really help the planet, our money needs to be invested in ‘good’. Investing in companies with climate positive goals encourages them (and allows us), to expand our positive impact. Our Global Water Fund, one of a kind in the NZ market, sets out to help achieve this.

It is a diversified global fund that aims at above-average long-term returns from investing in companies that produce things like water filtration systems, pumps, pipelines, infrastructure and technology to help increase sustainable access to clean water.

“We believe that investing in companies that are actively trying to help solve some of the issues related to the water crisis, not only helps people and planet, but it also makes for a good investment long term” says John Berry, Pathfinder CEO.

The problem of water scarcity is a global issue. Along with biodiversity loss and issues related to human suffering due to lack of water there are also huge infrastructure issues to solve in many parts of the world. And according to the UN, there are just seven years left to achieve the Sustainable Development Goals – many of which are water related.

"Ageing infrastructure and climate change is driving significant investment to create the resilience we will require in the future. says Mike Kenealy, Portfolio Manager. "We want to invest in companies enabling that."

Since inception in 2014, the Global Water Fund was designed around broad global themes like water scarcity, demographics (global population growth), urbanisation, infrastructure, and climate change and then drilling down to look for opportunities within the sectors that would likely be most affected. For instance, the infrastructure that goes into improving drinking water and wastewater treatment; how residential and commercial buildings will be upgraded to be more water efficient and how the agriculture sector will deal with a less predictable climate. Although many the companies in the portfolio have changed or evolved since inception, the themes have remined the same. To get a sense of the difference these companies are making, let’s look at some in greater detail.

Organo is a comprehensive water treatment engineering company. They are involved with water purification to wastewater treatment, and from water for laboratories to high-volume water for factories. For example, their ‘Ultrapure water’ is used in a range of fields including the healthcare and pharmaceutical industries, where safety is always a top priority. We were impressed by their company philosophy that recognises that the preservation of the earth’s environment is of the greatest importance for every human being, and we align with the value they place on their employee’s wellbeing, approaching their corporate activities with integrity and fairness.

Itron is innovating new ways for utilities and cities to manage energy and water. They operate in 100 countries developing solutions that help connect communities, encourage conservation and increase resourcefulness. For example they install acoustic leak detection systems to help city councils save water by allowing them to find the source of leaks faster than any other technique. This reduced water losses by 37% for a city in Utah.

American Water is the largest regulated water and wastewater utility company in the United States. They provide safe, clean, reliable, and affordable drinking water and wastewater services to more than 14 million people. They have been ranked 18th on Barron’s 100 Most Sustainable U.S. Companies 2023 for five years. And in 2023 they were recognised on Bloombergs Gender Equity Index - which allows companies to track their progress on gender inclusion, leadership and pay parity.

Ferguson is a leading distributor of plumbing and appliances, (amongst other things), that help to build and improve water infrastructure like pipes, valves and tech.This is relevant because engineers, and advocacy groups in 2020 estimated that making all the needed investments in U.S. water infrastructure would add $4.5 trillion (and eight hundred thousand jobs) to the U.S. economy by 2039.

Keen to invest? Our Global Water Fund is invested in companies in North America, Australasia, Japan, Europe, United Kingdom and Asia. The fund is considered higher risk, with a recommendedof 8-10 years, returns are updated monthly on our website here.

If you are keen to invest there is a minimum investment of $5000 to get started, or $2500 if you’re a Pathfinder member. For more on its performance and returns and for a full Fact Sheet please visit our Managed Fund page here.