Two years ago, district authorities in the Yonne department in France banned the residents of Etais-la-Sauvin from drinking their tap water.
They were told that it was unfit for drinking due to high levels of various pesticides (including metazachlor) in the catchment area, being above permissible levels. And the town council could not afford to build a treatment unit to purify the polluted groundwater.
Alternatively, the town’s water system, which is independent, could be connected, for a fee, to the safer and better equipped system of the Fédération des Eaux Puisaye-Forterre. But the system in Etais-la-Sauvin is old and ill-adapted; more than half the water it carries leaks into the ground. Connecting it to the neighbouring system could therefore lead to some other towns being deprived of their water supply.
Above and beyond the specific context of this example, i.e. the petty aspects of local politics and the private interests of the stakeholders involved, it fully illustrates some of the growth factors we expect of the world of water in future. The case here is one of a village in France, but the problem is the same in other climes, albeit in different forms.
Firstly, agricultural practices must be reviewed (by the government), drinking water standards must be tightened up, but also the necessary investments must be made to capture the noxious unwanted molecules.
Secondly, dilapidated installations must be renovated or repaired; water is becoming scarce and expensive; each drop will be precious.
Moreover, in some countries, policy reforms must be put into legislation so that small and therefore insolvent local authorities are not left alone to bear the burden of these investments.
Other growth factors complete the picture that this little French village paints. We can list global demographic growth, changing lifestyles in emerging countries and the ensuing increase in water consumption, and lastly climate change, which will transform methods of storing and treating water.
The impact and permanence of all these growth factors over the long term will result in major investments; experts predict that USD 25 trillion will be spent in the world of water globally over the next 25 years, i.e. more or less half of France’s GDP per year.
Another figure speaks for itself: according to a recent OECD report on the topic, investments in water supply and treatment will need to be increased three-fold, based on current conditions, to achieve Sustainable Development Goal 6, defined by the United Nations, i.e. to extend safely managed water supply and sanitation services to those who don’t current have them. This corresponds to an annual growth rate of 7.6% over 15 years.
And that’s without taking into account:
- the impacts of global warming and the vital investments it will take to overcome them (recycling waste water, collecting and storing water, desalinating seawater, drip irrigation)
- the stricter standards that will inevitably be introduced to improve the very poor quality of water (pesticides and endocrine disruptors in the water we drink)
- the cost of the host of tests needed to guarantee water purity
- digital innovations in measuring water consumption (connected sensors, ultrasound leak detectors, etc.).
All these factors make the world of water a strategic asset management sector for the future. BNP Paribas Asset Management is carefully studying such developments so as to make the right decisions for the management of its sustainable and responsible investment funds.
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More articles written by Alexandre Jeanblanc.