Investing in Water: How to Find Sustainable Companies
Sustainable Investing is becoming increasingly popular, especially with millennial investors and those who want to use their money to reflect their values.
This book redefines “value investing”, such that your values can be aligned with your investments.
These values might mean prioritising improvements in the world’s energy, water or health products; or they may mean aligning your investments with social equity or environmental considerations.
One such value is the maintenance of clean and healthy water, both for people and for the environment.
Looking at companies from an investment perspective, business who are sustainable and improving the planet are worth more than unsustainable ones, all things being equal, since we only have one planet to live on and unsustainable practices have led to fresh water becoming increasingly scarce.
With the increasing population, any products and services that increase sustainability are highly beneficial. Providing your money to these companies by supporting their share prices (over those of other companies) is a strong way of using your money to tell others that there is money to be made by backing entrepreneurs and innovations in these sustainable sectors. There are 3 stages to investing according to the definition of sustainable development.
Some examples of sustainable companies that contribute to water are listed below (from the book):
- Blue Sky Alternative Investments Limited (BLA:ASX)
Blue Sky Alternative Investments is an investor in water assets in Australia and is one of the few large Australian companies investing directly in water. In addition to its water investments, it has private equity funds that invest in student accommodation and agriculture assets. Blue Sky has revenue of approximately $60m, was founded in 2006 and is based in Brisbane, Australia. The ratio of the two highest paid executive salaries to the average worker pay for the company has been estimated at 10.
- Middlesex Water Company (MSEX:NASDAQ)
Middlesex Water Company is a Nasdaq listed company based in Iselin New Jersey, United States which operates in the Water Supply industry. Over the most recent financial year, Middlesex Water Company had sales of more than $130M. Middlesex Water Company, through its subsidiaries, provides regulated and unregulated water, and wastewater utility services. The company operates in two segments, Regulated and Non-Regulated. The Regulated segment collects, treats, and distributes water on a retail and wholesale basis to residential, commercial, industrial, and fire protection customers in parts of New Jersey, Delaware, and Pennsylvania. The ratio of the two highest paid executive salaries to the average worker pay for Middlesex Water Company has been estimated at 10.
- California Water Service Group Holding (CWT:NYSE)
California Water Service Group Holding is a NYSE listed company based in San Jose California, United States which operates in the Water Supply industry. Over the most recent financial year, California Water Service Group Holding had sales of more than $590M. It provides its services to approximately 477,900 customers in 83 California communities; 4,300 water and wastewater customers on the islands of Maui and Hawaii; 16,300 customers in the Tacoma and Olympia areas in Washington; and 7,600 water and wastewater customers in the Belen, Los Lunas, and Elephant Butte areas in New Mexico. The ratio of the two highest paid executive salaries to the average worker pay for California Water Service Group Holding has been estimated at 20.
The book gives 150 examples of companies that contribute to our sustainable development, including for water listed across all major markets.
The Sustainable Investor’s Handbook , by Mark Andrich available on Amazon.