From Morningstar Inc.:

Thames Water’s issues raise concern for investors seeking to positively impact the environment through UK water utilities. Leaks and contamination plague the aging infrastructure. Companies with environmental records may not be suitable for equity funds with dual objectives. Upgrading the water infrastructure will raise customer bills to unacceptable levels amid the current cost of living crisis.

Halma and Water Ecosystems are setting the standard for water and environmental service companies with clean water and sanitation as their focus. Other companies targeted for investment include Kurita Water Industries for ultra-pure water and Agilent and Thermo Fisher for environmental testing equipment. The need for plastic recycling and stormwater drainage systems is also driving investment opportunities.

Investors should consider upcoming developments in water treatment and regulation, like Ecolab’s treatment and purification solution for water used in agriculture. Xylem, another company, benefits from processing and testing water for toxic materials, while Arcadis leads the way in land reclamation. The increasing impact of climate change will sustain the long-term demand for their services.

With the global impact of climate change, water resources are becoming more vulnerable and valuable. Investors pursuing positive contributions should be discerning in their equity investments, considering companies’ environmental impact and potential for future growth.



Read more: Don’t Turn The Taps Off on Water Investments Just Yet