Key takeaways
- World Water Day will take place on March 22 and will focus on the theme of glacial preservation.
- Glaciers play a crucial role in the global water supply.
- As the Earth’s temperature increases, glaciers are melting more rapidly, disrupting the water cycle and leading to environmental challenges.
- Companies in the water industry could provide innovative solutions to climate action in multiple ways.
Why consider investing in water?
This year's World Water Day will take place on 22 March 2025 and will focus on the theme of glacial preservation. As glaciers around the world continue to melt at unprecedented rates due to climate change, the resulting shifts in the water cycle are having significant impacts on both people and our planet.
Glaciers play a crucial role in the global water supply by storing about 70% of the world's freshwater1. They ensure a consistent flow of water to rivers and lakes that is used for drinking as well as agriculture and energy production. They are also vital to numerous ecosystems.
Glaciers significantly impact and reflect changes in our climate. For example, glaciers help to regulate the planet’s temperature by reflecting sunlight and reducing the amount of heat absorbed by our planet.
The effects of meltwater
As the Earth’s temperature is increasing due to climate change, glaciers are melting more rapidly, disrupting the water cycle and leading to a range of environmental challenges. For example:
- The instability of meltwater flows is causing more frequent and severe floods, which can devastate communities and infrastructure.
- They also contribute to droughts by disrupting the regular supply of water to rivers and lakes, affecting agriculture, energy production and water availability for billions of people.
- The increased volume of meltwater contributes to rising sea levels, which threaten coastal areas with erosion and flooding.
- These changes are also damaging ecosystems, as many plants and animals rely on stable water sources and specific environmental conditions to thrive.
Investment is needed to protect our water
There is an urgent need to not only reduce carbon emissions but also to adapt our cities and infrastructure to cope with more extreme weather events. Additionally, we believe it is crucial to implement remediation strategies to address the damage already caused by climate change.
Companies in the water industry could provide innovative solutions to climate action in multiple ways. Let’s have a look at water and wastewater utilities.
- They play a crucial role in the water cycle through their primary responsibilities in water distribution and treatment. These different activities are highly energy-intensive, potentially making energy efficiency and reliance on renewable energy sources key challenges for these companies today.
- Utilities are also important in managing extreme weather events. Stormwater management equipment, such as pumps, combined with smart water technology and Artificial Intelligence (AI), helps cities ensure a reliable water supply and handle increasingly frequent and severe weather events. Smart sensors and meters can provide real-time monitoring of water levels, pressure and quality, allowing utilities to manage water distribution efficiently. AI uses predictive analytics to forecast weather patterns and potential water supply issues, allowing utilities to prepare by optimising water storage and distribution. Utilities can take proactive measures, such as releasing water from reservoirs before a storm or conserving water during dry periods.
- Companies in the quality testing and treatment sector can play a vital role after these weather events. They develop technologies crucial for removing contaminants, providing safe drinking water and restoring ecosystems affected by pollution.
- More broadly we believe that utilities, other infrastructure and cities need to become more resilient against climate change. One such example of this is where engineering and consulting companies work on projects to reinforce coastlines, construct flood barriers and design buildings to withstand severe weather conditions, ensuring communities remain safe and functional.
Therefore, it is not just about water utilities but also about technology and infrastructure companies working together to provide clean water to communities.
Discover our fund
KBI Global investors, part of the Amundi group, has been investing in the water space since 2000. Discover more in our article “Investing in Water: Ride a steady wave in a volatile world” or view our KBI Water fund in more detail.
KBI Water Fund
Unless otherwise stated, all information contained in this document is from Amundi Asset Management S.A.S. and is as of 21 March 2025. Diversification does not guarantee a profit or protect against a loss. The views expressed regarding market and economic trends are those of the author and not necessarily Amundi Asset Management S.A.S. and are subject to change at any time based on market and other conditions, and there can be no assurance that countries, markets or sectors will perform as expected. These views should not be relied upon as investment advice, a security recommendation, or as an indication of trading for any Amundi product. This material does not constitute an offer or solicitation to buy or sell any security, fund units or services. Investment involves risks, including market, political, liquidity and currency risks. Past performance is not a guarantee or indicative of future results.
Date of first use: 21 March 2025
Doc ID: 4329256
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