Out of Sight, Out of Mind: Groundwater – The Need to Shine a Light
Bhavin Siyani, CFA
Global Equity Analyst
On World Water Day we shine a light on one of our greatest challenges and the opportunities in solving it. Water use has been increasing worldwide by about 1% per year since the 1980s, driven by a combination of population growth, economic development and shifting consumption patterns. Global demand is expected to continue increasing at a similar rate until 2050, accounting for an increase of 20 to 30% above the current level of water use [1].
Research has shown just how stark the challenges are. NASA’s GRACE satellite, which monitors the storage trends of the largest aquifers on the planet, has shown that more than half have exceeded their tipping points and are now being depleted [2]. Falling groundwater levels adds another challenge - as groundwater levels drop, oxygen rushes in to fill in the cavities reacting with the geology resulting in a more acidic water source - reacting with contaminants such as cadmium, mercury and arsenic – both naturally occurring and human induced, which can have severe health impacts. This is evident with what the World Health Organisation classifies as the largest poisoning of a population in history, with 20 million people in Bangladesh exposed to groundwater contaminated with arsenic [3].
The pursuit of understanding and improving water quality is a timeless challenge. From the Hippocratic sleeve for filtering water, to tracing the cholera epidemic in London in 1854 to a contaminated water well, to the cutting edge water treatment within the International Space Station; water quality and innovation have been constant partners.
This innovation continues within the private sector, an example is Xylem. A company we believe is helping to solve the critical water quality and quantity challenges within both the groundwater and more broadly the water cycle. Xylem’s products help customers solve water scarcity, increases society’s resilience to climate change and improves our understanding of what lies beneath us. These products tackle water leakage, contamination and provide insight into water consumption.
A particular area of focus is ‘non-revenue’ water – water that has been treated but fails to reach the end user because of leaks or poor metering. One in every six gallons of treated water is lost in this way in the US and in developing markets non-revenue water losses can be much higher [4]. The role of digitalisation and the use of smart data plays a vital role in tackling the challenge. Xylem through their smart monitoring technology helps utilities identify and tackle leaks, reducing water losses and in turn placing less stress on our fragile groundwater reserves.
Groundwater is one of the world’s most precious resources. It is the primary source of drinking water for approximately half of the world’s population [5]. Water has to be accessible, preserved and cared for. Ubiquitous water monitoring that includes real-time supply, demand and quality is the key to managing water sustainably and we believe that companies who provide solutions to unmet societal needs will prosper in the long run.
[1] UN Water: UN World Water Development Report 2019
[2] NASA JPL: https://climate.nasa.gov/news/2297/study-a-third-of-big-groundwater-basins-in-distress/
[3] WHO: Contamination of drinking-water by arsenic in Bangladesh: a public health emergency
[4] Xylem: Annual Report 2021 (page 4)
This content should not be construed as advice for investment in any product or security mentioned. Examples of stocks are provided for general information only to demonstrate our investment philosophy. Observations and views of GIB UK may change at any time without notice. Information and opinions presented in this document have been obtained or derived from sources believed by GIB UK to be reliable, but GIB UK makes no representation as to their accuracy or completeness.
