The global water market, which is estimated at $480 billion for 2010, is expected to grow at an annual rate of 6.2% over the next five years, according to a study published on Monday, August 9, by SAM, the Zurich-based investment boutique firm. The study focused exclusively on Sustainability Investing.
In announcing the study, “Water: a market of the future,” SAM said companies that offer innovative products and solutions along the entire water value chain, particularly in the areas of efficient irrigation, advanced wastewater treatment and its reuse, will profit from the growth trend. This, in turn, will create attractive investment opportunities for investors with long-term horizons, it said.
The study found that water consumption has been accelerating since the mid-20th century, when it stood at 1.5 trillion km?. Today, consumption has reached 4.5 trillion km?, and is expected to rise to some 6.5 trillion km? by 2030, resulting in significant shortages. Agricultural applications accounts for an average of 70% of global water consumption, followed by industrial production (20%) and private consumption (10%).
According to SAM, the growing demand for water is being driven by several megatrends. Population growth and urbanization are simultaneously creating regional concentration processes. In addition, climate change will cause variations in the hydrological system, altering global water supplies.
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SAM’s analysis identified four business segments that could prove attractive for investors:
? Water distribution and management