World Water Day: Why Now is the Time to Invest in Water Innovation


By Will Sarni

Water is one of the most precious and precious resources in the world. None of us can live without it.

The American West is now among the most water-stressed regions of the world and faces impacts on business growth, economic development, social well-being and the health of ecosystems. The Colorado River runs through much of the region, which supports an estimated $ 1.4 trillion in annual economic activity and 16 million jobs in seven states.

The New York Times article, Wall Street Eyes Billions in the Colorado’s Water, puts it well: “In the West, few problems carry the political burden of water. Access to water can make or break both cities and rural communities. comes out of every part of the economy, from almond orchards to ski resorts to semiconductor factories. And with the worst drought in 1,500 years drying out the region, water anxiety is at an all time high. “

And according to reports earlier this year, a drought contingency plan was triggered for the Colorado River for the first time due to what is called “an increasingly gloomy forecast.”

There is too much at stake to sit idly by and wait for someone else to find a solution.

The need for innovative approaches to tackle water scarcity, poor quality and lack of access to safe drinking water was amplified in the 2017 report Liquid Assets: Investing for Impact in the Colorado River Basin, and most recently in the 2019 report, Digital Technology Opportunities for the Colorado River Basin. In particular, arguments have been made for private capital to invest in innovative technologies such as smart agriculture, remote sensing and artificial intelligence.

We need 21st century technologies, innovative financing and financial market tools to solve the water problems of the Colorado River Basin and beyond.

Enter the Colorado River Basin Fund, launched today, World Water Day 2021, to advance innovative approaches to water challenges and engage a range of stakeholders, all of whom have important roles to play in solve them. The Colorado River Basin Fund will aim to address these challenges and opportunities by identifying, investing and scaling up early stage water sector technological innovations in categories such as acquisition and analysis of satellite data, IoT and advanced computing, artificial intelligence and smart agriculture for water, homes and cities. We see the Colorado River Basin as a kind of strategic test bed to determine the feasibility of emerging technological solutions for further application in the global water sector providing an opportunity for scale.

Innovation in the water sector, corporate orientation and finance collide

We now see a more defined intersection of innovative thinking and financial tools. The recently launched Nasdaq Veles California Water Index (ticker: NQH2O) is a significant step forward in bringing thinking and tools to financial markets to improve management and transparency in the water sector. As the CME Group overview explains, the index tracks the price of water rights leases and sales transactions in the five largest and most actively traded regions in California.

The positive collision between innovation and finance also lends itself well to the rise of environment, social and governance (ESG) as a priority for companies. This has been well advanced for some time, but the pandemic has accelerated this trend due to an increased focus on the role of business in solving ‘wicked problems’. In addition, many companies have achieved improved financial performance thanks to their substantial and credible ESG reports.

For example, a recent Blackrock report, Sustainability – Resilience amid Uncertainty, examined the performance of ESG investment funds relative to their peers. According to Blackrock, “In Q1 2020, we saw better risk-adjusted performance for sustainable products globally, with 94% of a globally representative selection of broadly analyzed sustainable indices outperforming their parent benchmarks. The study noted that while the Dow Jones Industrial Average lost around 34% in the first quarter as the Covid-19 pandemic spread, Morningstar reported that 51 of its 57 sustainable indices outperformed its counterparts in the wide market. At the same time, MSCI said that 15 of its 17 enduring indices outperformed their general market counterparts.

Colorado River Basin Fund launch aligns with accelerating investor and business interest and engagement in addressing ESG issues. This interest is now translating into real investments in technologies and companies that solve very specific environmental and social challenges. As water is an urgent environmental, social and economic issue affecting virtually every region of the globe, the Colorado River Basin Fund will seek to provide a tangible opportunity to activate the ESG strategies of investors and businesses.

Will Sarni is the Founder and CEO of Water foundry and founder of the Colorado River Basin Fund.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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