Water networks and reclamation, here are the good deeds of the Blue Economy

The European Union is reaffirming its leading role in the sustainable transition of the global maritime sector with an investment of more than EUR 300 million (EUR 301.5 million to be exact) decided a few weeks ago during the international conference Our Ocean that brought together politicians, maritime industries, NGOs and scientific institutions under the theme 'Digital Oceans'. The EU package will finance strategic actions in key areas: from sustainable blue economy to marine pollution, from marine protected areas to ocean digitisation, from sustainable fisheries to climate change monitoring. A commitment that has important repercussions on the so-called blue economy.

Among its various segments, according to Daniel Fauser, co-manager of the Swisscanto (LU) Equity Fund Sustainable, the most interesting and particularly strategic ones for investors today, particularly in terms of the environmental challenges they intend to address, are technologies for treating water contaminated by micropollutants, such as perfluoroalkyl substances (PFAS) or pharmaceutical residues, which pose growing public health and environmental problems. "Water protection has to be considered both directly and indirectly," the expert points out. "In the first case, we find companies developing and implementing solutions to measure water quality and help make it usable for longer, for example through the development of chemicals. Indirect water protection is based on the 'polluter pays' principle and offers preventive measures for water-intensive and water-polluting industries. For example, the American water treatment and analysis company Xylem equips wastewater treatment plants with steps to remove microcontaminants. The Japanese company Kuraray has also established a leading position in water treatment, focusing particularly on Pfas removal. In France, Veolia has announced that it aims to achieve revenues of EUR 1 billion by 2030 with solutions against micropollutants. Another important sector is the digitalisation of water networks, through the use of smart meters and intelligent systems for monitoring and managing leaks, which are fundamental for increasing efficiency and reducing waste. "Not to be overlooked," adds Fauster, "is the sector of climate change resilient infrastructure, such as the 'sponge cities' projects, which improve the ability of urban areas to absorb and manage extreme weather events, reducing the risk of flooding and water stress."Main positions in the fund include stocks such as Ecolab Inc, Mueller Water Products Inc, Waste Management Inc, and American Water Works. "Water represents a truly global investment theme," concludes Fauster. "Many of the most established and profitable publicly traded companies in this space are based in the United States, but operate internationally, with a highly diversified business presence."

For the small investor, one way to invest in this sector, always with a medium to long term horizon, are funds or ETFs specialising in water, many of which devote ample space to this specific sector. In terms of performance, among the best there are those who have achieved performances close to 40% over three years, but on average many have exceeded the 14% mark over the same time horizon (see attached table). On a shorter horizon, i.e. one year, none of those examined exceeded the inflation rate of around 2%.

Even the blue economy today is increasingly confronted with the impact of artificial intelligence which, as experts say, can act as an impact multiplier on two distinct but complementary fronts. On the one hand, AI can optimise the management of water networks, thanks to predictive models for infrastructure maintenance, proactive leakage detection and trend analysis in water quality, anticipating possible critical situations. On the other, the intensified use of AI, especially in data centres, leads to a growing need for sustainable cooling solutions. Given that water is already today a key resource for the thermal management of these facilities, it will be essential to