April 6, 2021

Two extreme water crises have occurred since the new year and are moving water conservation to the top of the ESG pecking order. Access to clean water during Texas blackouts was a major concern and on the other side of the globe, Taiwan is experiencing a historic drought, detrimental to its semiconductor industry. Most ESG opportunities are centered around greenhouse gas emission, however nine of the ten greatest risk factors for humanity are linked to the water crisis. Many companies couldn’t survive without ample water. The Thomas Schuman Capital U.S. Water Security Index gives its weight to the largest 550 companies by their water footprints and risk exposure. Companies like AT&T or Microsoft are given higher weights. The TSC has outpaced the S&P 500 by over 14% since its inception. The Invesco Water Resources ETF directly invests in purification and conservation companies and has also outpaced the S&P.

(Los Angeles)

FINSUM + Magnifi: Severe droughts are a serious threat to many industries in the U.S. Hedging against an increasingly likely risk scenario is a smart play.

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