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Published: 21st July 2021 (1 Min Read)

In our sudden heatwave, all of us long to slide into a pool, or walk down the beach and into crystal clear water. Many of you will know that I am a keen open water swimmer, and the lakes will be warming up, so my favourite havens are in the River Itchen. It is so beautiful at this time of year.

So, I have to declare an interest in our tarns and tides, our rivers and reservoirs beyond investment, but the fines imposed upon Southern Water[1] recently are a reminder to investors that all is not well in our watercourses. Swimmers were already abundantly aware.

Prior to this announcement, I had already commented to the broker of a large, listed water company that the company’s failure to address environmental concerns in its most recent annual results presentation was a risk for investors. QED.

Please note that this announcement for Southern Water was for sins committed prior to 2015.

Have things improved? Not really. “Whilst there were improvements in 2020, no single company achieved all the expectations for the period 2015 to 2020.[2]

If you want to feel really depressed about our rivers, the regulators, the Environment Agency, farming practices and the water companies have a look at George Monbiot’s “Rivercide”[3], which was broadcast last week. A litany of issues was exposed.

But out of crisis comes opportunity, and a timely report[4] from Swedish public pension scheme “AP7” and Impax.

Water is vital to life, to virtually every business in the world and to all sectors of the economy. As a result, it is one of the most heavily regulated industries globally. Yet at the same time, water is also a systemic and unpriced global challenge with significant economic and societal risks. Too often water is overlooked in sustainability and risk assessments, and water data reporting is well behind climate reporting in terms of the amount and quality of disclosure.”

Water, as in daily life, provides threats and opportunities for investors. We need to engage, measure and invest.

Sources:
[1] https://www.gov.uk/government/news/record-90m-fine-for-southern-water-following-ea-prosecution
[2] https://www.gov.uk/government/news/progress-made-but-too-many-water-companies-still-falling-short
[3] https://rivercide.tv/?fbclid=IwAR3F8zlxG3u9cxOGEoilg-Wsv_bq0HAP_kFzgSv41USgUOPMdNaoH7Zbym0
[4] https://impaxam.com/wp-content/uploads/2021/06/Impax-Water_Report_2021.pdf?pwm=5268
Article written by
Simon James