Water ETFs: 3 Ways to Invest Better

Investing in water is a way to potentially make financial returns whilst considering the future of our planet.
But how can you find investments that focus on water? And how can you track their impact on the planet?
In this blog post, we'll discuss 3 better ways to invest in water
1. Water ETFs
2. Water use intensity
3. Water-related SDGs.

Quick Summary

-Sustainable investors can invest in Water ETFs with exposure to areas such as supply pipe work, engineering, water treatment products, and equipment.
-Water use intensity is a measure of how much water a company uses to produce its products or services.
-Investors can compare how the revenue of companies they’ve invested in aligns with UN goals.

Water ETFs

Water ETFs are one of many ways you can invest sustainably in water. Michael Burry is famous for having popularised the idea of investing in water-rich farmland as a way to invest in water.

Water ETFs invest in companies that provide products or services related to water. These can include companies that provide water treatment, water distribution, and water-related infrastructure. 
You can see investing in water ETFs like investing in a basket of water-related stocks.
But what do these companies do?
Generally investing in water provides exposure to areas like:
1. Supply pipe work, pumps and meters
2. Engineering companies
3. Water treatment products and equipment
4. Produce technologies for disinfecting, filtering and desalinating water
5. Distributing and managing hydraulic water networks

What is Water Use Intensity

Water use intensity is a measure of how much water a company uses to produce its products or services. This is an important metric for sustainable investors because companies with lower water use intensity are generally more efficient and less wasteful. 
There are different metrics you can use to calculate this.
For example, ETFs on GOODFOLIO investing platform display the direct and purchased water intensity.
The volume of water from natural sources and purchased from utility companies that is directly consumed by the company divided by the company's revenue.
The fact that it’s divided by the company’s revenue allows you to compare water consumption between companies of varying sizes.
To simplify that crudely:
Water Use Intensity = Volume of water consumed by the company / Company revenue
The lower that water use intensity, the less water they are using relative to their revenue.

Water Invest SDGs

UN Sustainable Development Goals (SDGs) are 17 goals adopted by the United Nations, to be achieved by 2030. They are a plan for achieving a more sustainable future, and that includes water.
For example here are 4 SDGs related to water:
SDG 6 - Clean Water and Sanitation
SDG 7 - Affordable and Clean Energy
SDG 13 - Climate Action
SDG 14 - Life Below Water
So how does that relate to investing?
Well, some ETFs aligned with sustainable investing also provide investors with data on how they align with these goals. More specifically you can look at the UN SDG revenue alignment of the companies underlying ETFs.
For example, a water technology company that provides innovative solutions for wastewater treatment would have high revenue alignment with SDG 6: Clean Water and Sanitation. 

Investing in Water with GOODFOLIO

GOODFOLIO is an investing platform that categorises ETFs by sustainability themes. There are 14 themes to explore including water funds, clean energy and gender equality.
Investing in water is a way to contribute to a better future whilst potentially making financial returns. 
By using strategies like water ETFs, water use intensity, and water-related SDGs, you can make better informed decisions about how to invest in water. 
GOODFOLIO is an investing platform designed for conscious investors. Funds go through a screening process and are categorised by sustainability themes including Water ETFs.
That also includes:
1. Fast sign up - typically onboard in less than 10 minutes‍
2. Themes - funds are categorised by sustainability themes
3. Screened ETFs - funds are screened to meet our transparency and sustainability information standards
4. Impact reporting - up to date reports including UN SDG revenue alignment
5. Cutting edge toolsETF comparison tools based on impact, risk and returns
6. Sustainable ISA - create a new ISA or transfer your existing one with our help
7. Great customer support - we are always here to help!
Join the future of investing and start your free GOODFOLIO account today!
As with all investing, your capital is at risk.
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