Olivier de Berranger

As the water flows

Each year, 8 million visitors admire the Louvre’s masterpieces, preserved thanks to one of the world’s largest district cooling systems, a 50 km underground network serving more than 500 Parisian buildings, including the Paris Opera and the Banque de France. The Mona Lisa and the Venus de Milo owe their survival to a solution developed by Alfa Laval, world leader in heat exchange, and fluid separation and transfer. This solution, powered in part by water from the Seine and smart distribution substations, saves 500,000 cubic metres of drinking water a year. Emblematic of companies’ extraordinary capacity for innovation, this initiative is a response to a major global challenge.

Water, which astrophysicist Hubert Reeves said was rarer than gold on a cosmic scale, has become a major challenge. Water stress already affects a quarter of the world’s population. The UN estimates that a third of the world’s population will be affected by 2025 if the situation does not improve. The main causes of this crisis – global warming and the increase in the world’s population – are accelerating. Access to freshwater, which accounts for just 2.5% of the world’s surface water, is no longer a matter of course. Withdrawals are constantly increasing to meet the growing needs of agriculture, cities and industry. While global water consumption has already increased sixfold in a century, demand is set to rise by a further 55% by 2050, according to the World Economic Forum.

Freshwater scarcity will have a wide-reaching impact on biodiversity and health security. Aware of the scale of the challenge, companies are developing ambitious strategies and creative solutions. Swedish company Alfa Laval has developed a desalination solution that transforms seawater into drinking water. Finnish chemist Kemira boasts an extensive technological portfolio of water treatment solutions that ultimately help its industrial customers reduce their water consumption. Meanwhile, promising start-up Kumulus Water has developed a cutting-edge technology that replicates the effect of dew and creates drinking water by capturing moisture from the air using a solar-powered system. Its connected machine can produce up to 30 litres in 24 hours. Finally, Veolia, the world leader in environmental services, aims to triple its production of recycled water to 3 billion cubic metres by 2030, equivalent to the annual consumption of 54 million people. Recycling is especially promising, as only 11% of water is currently recycled on average worldwide, 1% in France,[1] but 15% in Spain, where the aim is to reach 35% by 2027.[2]

There are many ways of tackling this strategic challenge. Impact investing, which represents a global market estimated at over a trillion dollars,[3] is one of them. This symbolic figure underscores the critical role of impact finance in meeting this challenge, by channelling capital into these responsible companies in order to build a sustainable future while delivering financial performance. As we strengthen our commitment to impact investing, we are also mobilising our ecosystem around climate and biodiversity challenges. In November, the third Climate and Biodiversity Meetings will bring together experts, companies and investors to showcase solutions that can address the major challenges associated with water – also known as blue gold.

 

 

Disclaimer: The opinions expressed in this document are those of the author. LFDE shall not be held liable for these opinions in any way. The securities and sectors mentioned above are given by way of example. There is no guarantee they will remain in the portfolio over time.

 

[1] CEREMA, 2020
[2] Les Echos, 3 July 2023
[3] GIIN, 2022