On March 22, World Water Day, established by the United Nations in 1992, will recall the crucial importance of this resource and the urgency of managing it in a sustainable manner. Because water is subject to increasing pressures: accelerated urbanization and climate disturbances. “The demand for water increases quickly while the resources are limited, notes Nicolas Beneton, specialist in sustainable thematic investment at Robeco. In recent years, extreme climatic conditions in many regions of the world, the dilapidation of infrastructure or the propagation of eternal pollutants in ecosystems have become important challenges to which States and businesses seek to respond.”
An annual growth market of 3 to 5 %
The figures are final and illustrate the magnitude of these challenges. Since 1962, global renewable fresh water resources have dropped by 60 %, according to an analysis of BNP Paribas. At the same time, UNICEF estimates that at least 2 billion people consume contaminated drinking water. To this is added aging infrastructure and leaks, which cost the company nearly $ 39 billion each year.
Guaranteeing universal access to drinking water will require massive investments. In a study published in 2020, the World Resources Institute estimated that sustainable water management for all countries and main basins would require $ 1,040 billion per year between 2015 and 2030. The same year, the organization of cooperation and economic development evaluated 90 billion euros per year the necessary investments in Europe until 2030.
As alarming as it is, this situation also represents an opportunity for investors. The water market, estimated between 1,000 and 1,500 billion dollars, records annual growth of 3 to 5 %. Certain segments, such as intelligent water meters, desalination or intelligent water management systems, even display two -digit growth rates. Without forgetting that companies in the sector, due to its nature, are much less sensitive to economic cycles.
“The interest of investing in water is based on secular trends that are constantly increasing, says Marc-Olivier Buffle, responsible for thematic research at Pictet AM. The mobilization of private capital appears to be a necessity to meet the growing needs for financing infrastructure and water-related technologies.”
Invest live or via funds
But how to invest in this theme? It is possible to buy specialized business actions, such as Xylem, which offers ultraviolet disinfection solutions, Parker Hannifin, which develops desalinizers, or Ecolab, which provides, among other things, solutions to analyze and assess water quality. It is still necessary to identify them, the universe of companies listed in the water remaining very limited, 100 to 300 companies, then analyze them.
Another solution: invest via specialized funds. Morningstar lists around fifty common funds and ETF exposed to the sector. Among these, the Funds of Pictet and Robeco were pioneers in this area. Since its launch in 2001, the dressco strategy has been playing with the MSCI World index, a reflection of international actions, with a performance of 7.92 % per year on average, at the end of February 2025. As for Pictst Water, launched in 2000, the strategy has an annual growth of around 8 % on average.
According to Morningstar, specialized investment funds managed 30.1 billion euros in Europe last year, compared to 12.6 billion five years earlier. These funds experienced a particular craze during the health crisis, with assets under management going from 14.8 billion in March 2020 to 35.3 billion at the end of 2021. Please note, however, this sector is not free from risks. Regulations, technological innovations and competition can have a significant impact on certain companies. The scarcity of water and pollution nevertheless make it an issue for the future for the planet. And your savings.